Student accommodation specialist the Unite Group has launched a new £275m 10-year bond with an interest rate of 3.5% which it says will provide increased flexibility to fund the company’s development pipeline, as well as lengthen the maturity and reduce its overall cost of debt.
The bond will increase the company’s weighted average debt maturity from 4.6 years to 5.8 years with its all-in fully drawn debt costs reducing to 3.6%.
Unite announced the bond alongside a trading update, which showed that its portfolio is 98% let for the 2018-19 academic year and its exposure to high and mid-tier universities is on track to reach 90% on completion of its secured pipeline.
It opened 3,074 new beds in September in Birmingham, Bristol, Durham, Newcastle, Portsmouth and Sheffield.
Richard Smith, chief executive of Unite Students, said: “It’s great to see the momentum we achieved at the half year continuing. The supportive market dynamics are underpinned by a portfolio focused on universities where demand is strongest and our growing university partnerships.
“Going forward, we expect to deliver further efficiency gains, primarily through expanding the scale of the portfolio under management.”
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