London-listed residential property owner and manager Grainger has priced a 拢200 mln (鈧�240 mln) secured bond, which is being issued to reduce the company's reliance on traditional bank debt and to fund investment.
London-listed residential property owner and manager Grainger has priced a 拢200 mln (鈧�240 mln) secured bond, which is being issued to reduce the company's reliance on traditional bank debt and to fund investment.
The 5% bond issue is expected to close in the last week of November.
The net proceeds will be used to repay 拢106 mln of bank loans, break certain existing interest rate swaps at a cost of 拢37 mln and reduce drawings under the group's revolving banking facility.
'This will leave the group well positioned to take advantage of future investment opportunities in the residential market,' Grainger said.
The bond issue, the company added, will strengthen the group's balance sheet by diversifying its sources of debt and lengthening its average debt maturity to 5.5 years from 4.6 years at end-September 2013. Grainger's weighted average interest rate before costs will fall to 5.4% from 5.7% at end-September, and is slightly above the 5.3% for the 12 months prior to that date.
Following the completion of the bond issue, Grainger's consolidated loan to value ratio will be slightly below 50%. The company reiterated its intention to keep this ratio between 45% and 50%.
Grainger has received corporate credit ratings from both Fitch and Standard & Poor's of BB stable, and the bond has been rated by both agencies as BB+ stable.
