Hammerson has raised $443m in its debut US private placement transaction to repay existing debt.
The agreement with nine US institutions for the placement of 7, 10 and 12-year notes will give the REIT the cash in two tranches in 2014.
The fixed-rate notes are denominated in dollars, sterling and euros, with the dollar portion being swapped to fixed euro.
This gives a weighted average coupon at a fixed rate of 3.6%, with a weighted average maturity of nine years and an equivalent nominal value of £277m.
Following the final drawdown in June 2014, Hammerson will repay existing floating-rate debt and increase the proportion of the group’s fixed-rate debt from 72% to 85%.
The financing will also extend the weighted average debt maturity by approximately to 6.3 years from its current 5.9 years.
Hammerson said: “The attractiveness of this funding opportunity was enhanced by the ability of the US investors to defer closing, enabling Hammerson to maximise the benefit from low floating rates on its banking facilities.”
The funding will partly refinance upcoming bond maturities, including the firm’s 2015 €480m eurobond, which has a coupon of 4.875%.
Bank of America Merrill Lynch, JP Morgan and Barclays acted as agents on the transaction.
Timon Drakesmith, chief financial officer at Hammerson, said: “This financing locks in long-dated funding with appealing coupons, whilst the flexible terms allow us to retain the immediate benefits of low floating rates.
“Being Hammerson’s debut issuance into this market, we are delighted to have created new debt investor relationships to further diversify our sources of finance and build on our strong liquidity position.”
bridget.o’connell@estatesgazette.com
