SEGRO has made three separate announcements this morning which, when taken together, comprise the redemption of €118m of existing (debt during August and September), while raising €450m of new debt finance in a private placement that is split across three tranches. The announcements can be summarised as follows:
- SEGRO is redeeming the last of its 6.750% notes due in 2021. These will be redeemed at 108.450 percent, together with accrued interest. Of the original £300m issued, £79.3 million remains outstanding.
- SEGRO is redeeming the last of its 7.000% notes due in 2022. These will be redeemed at an adjusted redemption price of 110.559 per cent., together with accrued interest. Of the original £150 million issued, £39.1 million remains outstanding.
- SEGRO has arranged a private placement of €450m that comprises 12, 15 and 20 year senior unsecured notes with a group of institutional investors. This translates to a weighted average coupon of 1.63 per cent and a weighted average maturity of 16.8 years.
The new €450m issue
The new issue comprises three tranches:
- €150 million at a fixed coupon of 1.35 per cent due 2032;
- €50 million at a fixed coupon of 1.45 per cent due 2035; and
- €250 million at a fixed coupon of 1.83 per cent due 2040.
SEGRO says that, taking its pro forma position as at 30 June 2020, and taking into account the associated hedging, the impact of these transactions is to extend its average debt maturity (on a look through basis) to 10.7 years and reduce the average cost of gross debt to 1.6 per cent (including joint ventures at share, excluding commitment fees and amortised costs). After redeeming the 2021 and 2022 notes, the proceeds will be used for general corporate purposes.
About SEGRO
SEGRO is a UK Real Estate Investment Trust (REIT) that is listed on the London Stock Exchange and is a constituent of the FTSE 100 index. It owns, manages and develops modern warehouses and light industrial property and had a portfolio comprising 7.8 million square metres of space (84 million square feet), valued at £12.2 billion as at 31 December 2019. Its assets are positioned strategically at locations in the UK across London and the South-East and Midlands regions, while in Continental Europe it has developments in France, Germany, Italy, Poland, Spain, The Netherlands and the Czech Republic. Its portfolio spans modern big box warehouses, used primarily for regional, national and international distribution hubs, as well as urban warehousing located close to major population centres and business districts.