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Lar España issues €400m green bond

Lar España, which owns a portfolio of shopping centres in Spain, has successfully closed an issue of €400m of senior unsecured green bonds.

The issue was four times oversubscribed and the bonds have a fixed annual coupon of 1.750% and mature at the end of 2026.

Ratings agency Fitch has assigned a BBB investment grade rating to both Lar España and its bond issue.

In parallel to the issue, Lar España has launched a public offer to buy back €140m in senior secured bonds issued in February 2015, maturing in 2022 and has a fixed annual coupon of 2.9%, for which some of the proceeds of the new issue could be used.

The company intends to use the majority of the proceeds of the green bond issue to refinance, in whole or in part, a selection of its real estate assets in order to reduce its carbon footprint and convert them into environmentally friendly assets that meet the criteria of the 2021 Green Bond Principles.

As a result of this refinancing and the repurchase process, the company expects to reduce the average cost of its debt from 2.2% to 1.9%. Also, its average maturity will be extended from 2.6 to 4.9 years.

Lar España chairman José Luis del Valle said: “Having significantly brought forward the maturity of the debt with extremely strong demand among top-level public and private institutional investors, we have given clear proof of the excellent receptivity and international confidence in the differential retail project that Lar España Real Estate represents. We are proud of the recognition of investors, who have clearly expressed their confidence in the strength of our balance sheet, in our capacity to generate recurring income and in the profitability of our management and dividend distribution policy.”

“The transaction substantially strengthens our balance sheet structure, significantly reduces our financing cost and enables us to remain consistent with our proactive policy of maximum quality and transparency, profitability for shareholders and added value for all our stakeholders and for society in general. It also puts us in a leading position in view of the exciting recovery that the sector has already begun.”

LRE : Lar España issues €400m green bond

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