22nd Apr 2016 08:57
LONDON (Alliance News) - Property developer Hammerson PLC on Friday said it has signed a GBP420.0 million revolving credit facility with a syndicate of eight banks, which means it will now have more undrawn facilities available to it, refinancing its GBP150.0 million facility that was set to mature in April 2017.
Hammerson said the new facility was syndicated at an initial margin of 90 basis points over benchmark rates and will have a maturity of five years that can be extended to seven years. The older facility, which is being cancelled, carried an initial margin of 150 basis points.
The margin, a buffer charged to accounts for potential changes in market prices, is combined with an underlying funding rate for each currency to decide on the interest rate that Hammerson will pay for drawing down on the loan, for example Libor for sterling borrowing.
The property developer said new facility, together with the cancellation of the old facility, will result in a net increase of GBP270.0 million of undrawn facilities. The increase in liquidity will be used partially to refinance the EUR1.50 billion revolving credit facility used to recent investments in Ireland and Birmingham.
In September, Hammerson said it and joint venture partner Allianz Real Estate signed an agreement to buy the Project Jewel loan portfolio in Dublin, for a total of EUR1.85 billion. Hammerson paid EUR1.23 billion of the consideration, which the company said at the time had been funded by its existing financial resources, an acceleration of its disposal programme and a capital markets issuance.
Then in February, Hammerson purchased the Grand Central shopping centre in Birmingham and entered into a joint venture agreement for ownership of half the shopping centre. It split the GBP350.0 million acquisition price 50:50 with its partner, the Canadian Pension Plan Investment Board.
Hammerson said that, after it has signed its new GBP420.0 million facility, the total committed financing available to it will be around GBP4.40 billion. The terms of the new facility are the same as the GBP415.0 million revolving credit facility signed in April, 2015, it added, which would mean they include Hammerson's standard unsecured financial covenants.
Lloyds Bank PLC acted as coordinator for the facility and HSBC Bank PLC was appointed as facility agent. Bank of China Ltd London Branch, China Construction Bank Corp London Branch, Lloyds Bank PLC, Mizuho Bank Ltd and Wells Fargo Bank International were appointed mandated lead arrangers and bookrunners. Commitments were also provided by Barclays Bank PLC, Credit Industriel et Commercial and HSBC Bank PLC.
"It is encouraging that the revolving credit facility is on the same attractive terms that we set in April 2015 and four new major international banks have joined our relationship group. We believe this bank facility is the largest arranged by a UK property company so far this year," said Hammerson Chief Financial Officer Timon Drakesmith.
Shares in Hammerson were down 1.0% at 576.50 pence on Friday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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