LONDON–(BUSINESS WIRE)–Regulatory News:

Pershing Square Holdings, Ltd. (LN:PSH) (LN:PSHD) (NA:PSH) (“PSH”) today announced the private placement of $400,000,000 of Bonds with a coupon of 4.950%, due July 15, 2039 (the “Bonds”). The Bonds are unsecured and rank equally in right of payment with PSH’s existing $1 billion of senior notes (the “Initial Notes”).

“This issuance represents an attractive first step in beginning the process of refinancing PSH’s Initial Notes which come due in less than three years,” said PSH Chairman Anne Farlow. “The Board believes that PSH’s ability to access low-cost, investment-grade, long-term debt is an important competitive advantage for PSH, and is appropriate for PSH’s investment holding company structure. We expect it will contribute to improved long-term returns for shareholders.”

PSH believes that now is an opportunistic time to issue long-term debt in light of historically low prevailing interest rates, and the all-time low trading yield for PSH’s Initial Notes, which has declined from 6% to 3.7% since the beginning of the year. The Bonds do not have mark-to-market covenants like margin debt, and are well matched with PSH’s concentrated long-term investment strategy. The Bonds’ call and Key Man provisions provide PSH with substantial long-term financial flexibility. The issuance of the Bonds is not expected to have any impact on PSH’s current share repurchase program or future extensions or expansions of the program.

Use of Proceeds

The Bonds were issued at an attractive interest rate – materially below what PSH estimates is implied by the current public trading price of PSH’s Initial Notes, adjusted for their term. As a result, PSH believes that the issuance of the Bonds will establish a favorable benchmark rate which will assist PSH over time in refinancing, and/or extending the maturity of the Initial Notes, subject to market conditions. Bond proceeds will be available for new investments, share repurchases, and general corporate purposes.

Current Balance Sheet Metrics and Guidance

Proforma for the issuance of the Bonds, PSH’s Total Indebtedness to Total Capital Ratio (“Debt to Capital Ratio”) is 1.0 to 5.0 providing a substantial margin of safety to the 1.0 to 3.0 debt incurrence covenant in the Bonds and Initial Notes. PSH, however, views the current Debt to Capital Ratio including this new issuance to be at the higher end of its target range for leverage, and intends to manage down its leverage ratio over time through continued positive NAV performance, and the potential repayment, repurchase or exchange of existing debt if it can be achieved on economically attractive terms. PSH’s balance sheet remains extremely strong and highly liquid with net free cash on hand of $830 million, total gross cash of $1.25 billion, and a Total Net Debt (net of free cash) to Total Capital Ratio of 8%.

Call Provisions

The Bonds are callable at any time at par plus a Make Whole Premium determined by discounting the Bond’s scheduled interest and principal payments at the comparable Treasury yield to maturity plus 50 basis points up until July 15, 2034, the Par Call Date, approximately 15 years from today, when the Bonds become callable at 100% of par. The Make Whole Premium is capped as follows:

• 15% of par beginning on July 15, 2029 (10 years after issuance);
• 12% of par beginning on July 15, 2030 (11 years after issuance);
• 9% of par beginning on July 15, 2031 (12 years after issuance);
• 6% of par beginning on July 15, 2032 (13 years after issuance);
• 3% of par beginning on July 15, 2033 (14 years after issuance); and
• Zero beginning July 15, 2034 (15 years after issuance).

Key Man Provision

Until July 15, 2022, the Bonds have the same Key Man provision as the Initial Notes, which requires that if a Key Man event occurs, PSH must make an offer to acquire the Bonds and the Initial Notes at 101% of par plus accrued interest. This mandatory offer provision is eliminated in the Bonds beginning after July 15, 2022 when the covenant is modified to provide that if a Key Man event occurs, the specified Debt to Capital Ratio in the debt covenant is reduced from 1.0 to 3.0 to 1.0 to 4.0. If at the time of the Key Man event, PSH’s Debt to Capital Ratio is above the required ratio, PSH has a one-time obligation to reduce its debt to meet the new 1.0 to 4.0 ratio within 180 days. If the Key Man event covenant requires a reduction in existing leverage to meet the new 1.0 to 4.0 ratio, the Bonds become callable at 101% of par in the amount necessary to achieve the required debt repayment.

Shareholder Value Enhancing Initiatives

The PSH Board believes that the issuance of the Bonds represents a continuation of numerous recent shareholder-value-enhancing actions including:

• Refreshing the PSH Board with the addition of two new independent directors in April 2018;

• Removing PSH’s 4.99% ownership limit, creating the potential for additional demand for shares, in April 2018;

• Acquiring $300 million of PSH shares at $13.47 per share in a Company Tender in May 2018;

• The acquisition by insiders of more than $530 million of PSH Public Shares since June 2018;

• The initiation of a quarterly dividend of 10 cents per Public Share in February 2019; and

• The company’s current $100 million share buyback program, which was launched in June 2019.

About Pershing Square Holdings, Ltd.

Pershing Square Holdings, Ltd. (LN:PSH) (LN:PSHD) (NA:PSH) is an investment holding company structured as a closed-ended fund that makes concentrated investments principally in North American companies.

Important Notice

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in Australia, Brazil, Canada, France, Singapore, South Korea, Spain, the United Arab Emirates and any other jurisdiction where to do so might constitute a violation or breach of any applicable law or regulation or to any national, resident or citizen thereof.

The Notes mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the Securities Act) absent registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offering of the Notes in the United States.

PSH has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”), and investors in the Notes mentioned herein will not be entitled to the benefits of the Investment Company Act.

PSH is a registered closed‐ended investment scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and the Guernsey Registered Collective Investment Schemes Rules 2015, issued by the Guernsey Financial Services Commission.

In the United Kingdom, this announcement is being distributed to, and is directed at, only (a) persons who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); (b) high net worth companies, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; or (c) persons to whom an invitation or inducement to engage in an investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). The Notes are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Notes will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Persons distributing this announcement must satisfy themselves that it is lawful to do so.

The distribution of this announcement may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Forward‐Looking Statements

Nothing in this announcement is, or should be relied on as, a promise or representation as to the future. This announcement may include certain forward‐looking statements. Such statements are based on various assumptions and expectations which may or may not prove to be correct. No representations or warranties are made by any person as to the accuracy of such statements.

Pershing Square Holdings, Ltd. registered place of business: P.O. Box 650, 1st Floor, Royal Chambers, St. Julian’s Avenue, St. Peter Port, Guernsey, GY1 3JX