Office real estate investment trust Derwent London PLC launched an offering of £175 million of convertible bonds due 2025 as well as a repurchase of the outstanding £150 million of 1.125% convertible bonds due 2019.
The 2025 bonds, to be issued by Derwent unit Derwent London Capital No. 3 (Jersey) Ltd. at par, will bear a yearly coupon of between 1.0% and 1.5%, payable semiannually in arrears. The bonds may be converted into ordinary shares of Derwent, with the initial conversion price set at a premium of between 35% and 40% to the volume-weighted average price of 1 share for two consecutive trading days starting June 6, according to a release.
Settlement of the bonds is expected to occur on or about June 12, and the company will apply for the admission to trading of the bonds on the unregulated open market of the Frankfurt Stock Exchange.
Concurrently, Derwent is offering to repurchase bonds due 2019 that remain outstanding as of June 4. A reverse bookbuilding process is being carried out to collect indications of interest from holders of the bonds. Holders who tender the bonds will receive cash consideration per £100,000 in principal amount of the outstanding bonds that includes an initial repurchase price of £102,875 plus accrued but unpaid interest.
Settlement of the repurchase will be on or about June 13.
Barclays Bank PLC and HSBC Bank PLC are acting as joint global coordinators and joint dealer managers for the offering and the repurchase.
Barclays Bank, HSBC Bank, J.P. Morgan Securities PLC and UBS AG London Branch are acting as joint book runners for the offering.
Rothschild & Co. is acting as financial adviser to the company in relation to the offering and the repurchase.