20th Dec 2006 16:00
Great Portland Estates PLC20 December 2006 Redemption of 7.25 per cent Debentures and New Issue of 5.625 per cent Debentures Great Portland Estates plc ("GPE" or "Company") announces that holders of 99.9per cent of the outstanding amount of its 7.25 per cent First Mortgage DebentureStock 2027 (the "2027 Stock") have sold their holdings for cancellation to TheRoyal Bank of Scotland acting on behalf of the Company. The repurchase price of the 2027 Stock was set at a spread of 37.5bp over theyield of 6 per cent Treasury Stock 2028 at 11am today. In total £31.6 millionnominal of the 2027 Stock has been purchased at a cost of £41.8 million,excluding accrued interest, which will be funded from the Company's existingcredit facilities. GPE's Income Statement for the year to 31 March 2007 will be impacted by thepost tax cost of the premium on early redemption of the 2027 Stock andassociated fees totalling £9.1 million or 5p per share. GPE has today entered into a conditional placing agreement with Barclays Capitaland The Royal Bank of Scotland for a new issue of up to £50m nominal of GPE's5.625 per cent First Mortgage Debenture Stock 2029. The new issue will be pricedat a spread of 75bp over the yield of 6 per cent Treasury Stock 2028 on thepricing date which is expected to be in January 2007. The effect of these transactions on GPE will be to: • Reduce the annual interest cost by around £0.2 million• Increase earnings per share and interest cover• Cut the weighted average interest rate by 12bp to below 5.7 per cent• Change the Mark to Market of debt from 10p to 4p per share. Timon Drakesmith, Finance Director said; "These tactical refinancingtransactions will further reduce GPE's cost of capital as we enter the REITregime in January whilst retaining sufficient committed financing to fund ourcommitted development schemes." Contacts: Great Portland Estates plcTimon Drakesmith, Finance Director 020 7647 3034 Barclays CapitalJeremy Froud 020 7773 9634 The Royal Bank of Scotland plcRobert St John 020 7085 3205Andrew Burton 020 7085 8056 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GPOR.L