Hammerson has secured a new unsecured revolving credit -facility from nine banks at a margin of just 80bps.
The arrangement is part of a trend over the past year that has seen large listed corporates undertake early refinancings in order to drive down borrowing costs and take advantage of the cheap debt on offer.
The retail REIT has agreed a £415m loan on a five-year deal, which may be extended up to seven years on each bank’s approval and Hammerson’s request.
The facility will refinance the existing £505m revolving credit facility that would have matured in April 2016 and -carried an initial margin of 150 basis points. The existing facility will be cancelled, resulting in a net reduction of £90m of undrawn facilities.
BNP Paribas acted as co-ordinator for the facility. BNP Paribas, Bank of Tokyo–Mitsubishi UFJ, Barclays, HSBC, JP Morgan, Santander and Royal Bank of Scotland were appointed lead arrangers and bookrunners. Commitments were also provided by Deutsche Bank and Chang Hwa Commercial Bank.
Last year, Hammerson issued a €500m (£357.9m) bond with the lowest-ever coupon by a UK property company at 2%, 90bps over the mid-swap rate.
Last month Land Securities negotiated a £1.2bn revolving credit facility at a margin of only 75 bps, 45bps lower than the finance it arranged in 2011. British Land arranged its £485m facility in February at 90bps, beating Great Portland Estates’ £450m loan in October last year at 105 bps, which at the time was a record low for the cycle.
