Great Portland Estates has turned to the bond market for a second time in as many years, raising $200m (£128m) through a US private placement issue.
The London-focused REIT said the placement was originally launched at $75m and was more than five times oversubscribed, with the group subsequently deciding to increase the issue to $200m.
The medium-term unsecured US dollar notes have been fully hedged into sterling, providing GPE with £128m of debt at a sterling weighted average fixed interest rate of 4.59%.
This issue follows GPE’s successful inaugural £160m private placement issue in May 2011 at a sterling weighted average fixed interest rate of 5.32%.
The bond market has already been used successfully to raise cash by European players such as Immofinanz and by the UK’s Grosvenor, Cadogan Estates and the Howard de Walden Estate.
GPE’s issue consists of two tranches: $160m 4.20% senior notes due 2019 and $40m 4.82% senior notes due 2022.
The notes were placed with a select group of institutional investors, more than half being new investors in GPE.
The issue was priced on 15 March, signed on 9 May and will close with funds drawn on 30 May 2012.
Nick Sanderson, GPE finance director, said: “We are delighted at the appetite investors have shown for this issue and the attractive terms achieved.
“This financing supports our already robust liquidity position and enhances our debt maturity profile, with no group-level maturities until November 2015.
“Our strong track record in accessing debt funding on competitive terms from a range of sources reflects our focused business strategy, prime central London property portfolio and conservative capital structure.”
RBS and Lloyds Bank acted as joint agents.
bridget.oconnell@estatesgazette.com
