Canada Pension Plan Investment Board, GIC, Generali and a Qatari sovereign wealth fund have backed a €1.25bn bond issue by Spanish listed property company, Colonial, it is understood.
Colonial issued four and eight year notes with an average coupon of 2.2%. The respective €750m and €500m issues were “substantially oversubscribed”, the Barcelona-based company said.
Colonial would not confirm that the four institutions had taken part in the bond issue, but the company told IP Real Estate that more than 80% of the investors were “insurance companies, pension funds and asset managers, all with a goal of permanency”.
Colonial, which has a €5.5bn office portfolio in Barcelona and Madrid – and exposure to Paris through French REIT Société Foncière Lyonnaise – said the issue had been ”well received by the investment market”.
Chairman, Juan José Brugera said the issue, the first of its kind in terms of volume, terms and conditions in the Spanish and European property market in recent years, demonstrates how markets are “endorsing” the firm’s focus on a high quality, prime office portfolio diversified in three markets.
Colonial is already backed by the Qatar Investment Authority, along with Joseph Charles Lewis, Fidelity and Spain’s Grupo Villar Mir.
The firm will use net proceeds of the issue to repay an existing syndicated loan, as well as for other general corporate purposes. Finance costs could, it said, be cut by half, or as much as €20m a year.
Standard & Poor’s gave the notes a BBB rating.