21st Nov 2013 14:43
LONDON (Alliance News) - Residential property business Grainger PLC Thursday said it has priced a GBP200 million 5.0% secured bond due in December 2012, which it will use to repay bank loans.
The issue is expected to close next week.
Grainger, which undertakes fund, property and asset management along with residential-led development, said the proceeds will be used to repay around GBP106 million of bank term loans, to break certain certain existing interest rate swaps at a cost of around GBP7 million.
It will also be used to reduce drawings under the company's revolving banking facility.
The company said the bond will allow it to make future acquisitions in the residential property market.
It will also strengthen the company's balance sheet, Grainger said, by diversifying sources of debt and lengthening its average debt maturity to 5.5 years, from 4.6 years as at September 30.
Grainger said its weighted average interest rate before costs will reduce to 5.4% from 5.7% in September.
Following the completion of the bond issue, group consolidated loan to value ratio will be slightly below 50%, which is within its target of 45% and 50%.
"The issue was well subscribed, and the level of demand reflects the strength of investor confidence in Grainger's business," Chief Executive Andrew Cunningham said in a statement.
"The issue has placed the company in a very strong financial position, with extended debt maturities, giving us the ability to take advantage of future investment opportunities," he added.
The stock was trading 200.30 pence Thursday afternoon, down 0.30 pence or 0.2%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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