Great Portland Estates Plc raised £175 million through the issue of seven-year unsecured notes with a fixed-rate coupon of 2.15% to refinance £159.7 million worth of existing private placement notes.
The sterling-denominated notes were issued in a U.S. private placement. The notes were priced Feb. 22 and signed March 28, with the company planning to close and draw funds May 22. The new notes have similar financial covenants to the company's other unsecured debt and were placed with eight institutional investors, including three new lenders to the company.
The existing notes that the company intends to refinance were prepaid earlier in March for £176.1 million in cash. The notes had a blended fixed rate coupon of 5.3%, and were scheduled to mature in 2018 and 2021.
Great Portland Estates expects to prepay the remaining £127.7 million of existing private placement notes with the proceeds from its £435.0 million sale of Rathbone Square in London. The notes have a blended fixed rate coupon of 4.6%, and mature in 2019 and 2022.
The refinancing will extend the company's weighted average debt maturity to 6.4 years from 4.7 years, as at Dec. 31, 2016, and lower its weighted average interest rate to approximately 2.7% from 3.7%, as at 2016-end, according to a release.
NatWest Markets and Santander were the joint active agents for the new issue. JC Rathbone Associates are the hedging advisers for the prepayments.