NewRiver has announced its debut £300m sterling-denominated senior unsecured bond.
The company has now successfully completed the transition to a fully unsecured balance sheet and therefore all of its assets are unencumbered.
The issuance is in line with the company’s strategy to diversify its sources of funding, increase operational flexibility and increase debt maturity. Fitch Ratings is expected to assign the bond an investment grade rating of BBB+.
The £300m senior unsecured bond has a term of 10 years and a fixed coupon of 3.5%. The proceeds will be used to repay existing secured facilities totalling £177m, existing unsecured facilities totalling £50m and for general corporate purposes. Upon repaying the existing facilities, NewRiver will have a fully unencumbered and straightforward balance sheet with £680m of debt facilities being a £300m corporate bond, a £165m term loan and a £215m revolving credit facility. All of the company’s drawn debt will be 100% fixed.
Following the issuance of the bond and the repayment of existing facilities, the company’s weighted average debt maturity, including extension options, will increase from 5.5 years in September 2017 to 8.0 years, with a well spread maturity profile. Assuming that the existing £215m revolving credit facility is fully drawn, the company’s proforma all in cost of debt will be 3.1%.
Mark Davies, chief financial officer, said: “We are delighted with the level of investor support received for our debut senior unsecured bond. Going forward, the benefits to the company of increased maturity, better operational flexibility and fixed cost debt will be significant.
!Since our £225m equity raise in July 2017, we have successfully transitioned from a secured to an unsecured debt structure and all of our balance sheet assets are now unencumbered.
“The bond market provides access to capital for the future and the management team will remain focused on maintaining our strong rating.”
Barclays Bank and HSBC Bank acted as joint active bookrunners; NatWest Markets and Santander acted as joint passive bookrunners. The company was advised on the bond and credit rating by Rothschild & Co.
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