19th Apr 2018 18:03
LONDON (Alliance News) - Grainger PLC said Thursday that it has reduced its debt cost and priced a GBP350 million senior secured bond at a coupon of 3.4% for 10 years.
The net proceeds from the issue will be used to redeem the existing corporate bond, which is GBP275.0 million at a coupon of about 5% that matures in 2020, and for general "corporate purposes".
The impact of this refinancing will result in an annual interest saving of about GBP3.0 million, reducing the cost of debt from 3.5% to 3.1%.
The weighted average debt maturity will be extended from 4.7 years to 6.5 years, assuming extension options are exercised. Excluding extension options it will be 5.8 years.
The estimated prepayment cost for the existing corporate bond is GBP21.0 million which could result in the European public real estate net asset value reducing by 5 pence per share.
Vanessa Simms, Chief Financial Officer, said: "We are delighted by the response to this bond issuance. The investor demand is a testament to the successful implementation of our strategy and our growing Private Rented Sector portfolio which strengthens our income return.
"The refinancing is an important milestone in extending our maturity profile and provides long-term interest rate certainty at an attractive coupon, reducing our annual interest costs by GBP3 million."
Grainger shares closed up 0.5% on Thursday at 301.80 pence each.
Related Shares:
Grainger plc