FINANCE: Helical Bar has launched an offer of £85m five-year senior unsecured convertible bonds in order to repay debt.
The loan notes will carry a coupon of between 4% and 4.5% pa and the initial conversion price is set to be between 30% and 35% above the average market price of its shares during the bookbuilding.
The listed developer and investor, which has an option to increase the offering by up to £15m, will initially repay its existing revolving credit facilities.
This facility will remain available to redraw at a later date.
Helical added that the net proceeds could also be used for development funding or opportunistic investment.
Last month, the group led by Mike Slade reported record profit before tax of £101.7m and a total property return of 22.4% in the year ended 31 March 2014.
It added that it “continues to see attractive further opportunities in the market”.
In September last year, central London developer Great Portland Estates launched £150m of five-year unsecured convertible loan notes paying a 1% coupon.
It was one of the lowest-paying convertible bonds in UK history, reflecting the strength of demand for London property.
The group set the initial conversion price at £7.145 a share – a premium of 35% to the average market price of its shares.
The Helical bonds will be issued by wholly owned subsidiary Helical Bar (Jersey) and will be guaranteed by the company.
They will be senior and unsecured obligations of the issuer and will be subject to a negative pledge in customary Eurobond form.
If not previously converted, redeemed or purchased and cancelled, the bonds will be redeemed at par on the stated maturity date of 17 June 2019.
The final terms of the bonds are expected to be announced later today and settlement is expected to take place on or about 17 June 2014.
JP Morgan Securities and Royal Bank of Scotland are acting as joint bookrunners to the offer.
bridget.o’connell@estatesgazette.com
