Great Portland Estates has raised £175m through the issue of seven-year US private placement notes.
The new notes were placed with eight institutional investors, including three new lenders.
The sterling-denominated unsecured debt has a fixed rate coupon of 2.15% and has identical financial covenants to the group’s other unsecured debt.
It will refinance £159.7m of existing private placement notes which were prepaid last week at a total cost of £176.1m. These notes had a blended fixed rate coupon of 5.3% and were due to mature in 2018 and 2021.
GPE said it intends to prepay the remaining £127.7m of existing private placement notes with the proceeds from its sale of Rathbone Square, W1, which it should receive in April. The notes mature in 2019 and 2022 and have a blended coupon of 4.6%.
Nick Sanderson, finance director at GPE, said, “We are very pleased with the considerable investor appetite shown for this issue, with an order book of more than £800m testament to our focused business strategy and conservative capital structure. This financing locks in low-cost debt funding for the next cycle and we believe the coupon is the lowest sterling rate ever achieved by a REIT in the US private placement market.”
NatWest Markets and Santander acted as joint active agents on the new issue. JC Rathbone Associates is acting as hedging adviser in respect of the prepayments.
To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette
