France's SFL launches €500m bond at 1.8% coupon

Société Foncière Lyonnaise has announced the issue of a €500 mln bond with a term of seven years and a coupon of 1.875%.

Banks HSBC, Natixis, BNPP, CACIB and SGCIB are the lead managers on the issue.

At the same time, the French office REIT has also launched a tender offer for its two public bonds maturing in May 2016 and November 2017 as part of a strategy to improve its financial ratios.

SFL said the two operations will enable it to extend the average maturity of its debt.

The capital raising comes hard on the heels of SFL's purchase last week of the Parisian headquarters of natural gas distribution company GrDF from Blackstone Real Estate Partners Europe III.

The Paris-listed group is spending €230 mln on the acquisition of the office building which provides around 25,000 m2 at the rue Condorcet in the 9th arrondissement of Paris. The asset, located in the immediate vicinity of Gare du Nord, is fully leased to GrDF on a fixed term expiring in 2024.

It is the first major acquisition to be carried out by SFL in months. The company, which owns a €4.1 bn portfolio of offices located largely in the central business district of Paris, recently divested its 30% stake in Siic de Paris for a price of €24.22 per share, representing a total sum of nearly €300 mln.

SFL is controlled by Spanish property group Colonial which holds a 53% interest. Other major investors include Bank Crédit Agricole with 14%, Qatar's sovereign wealth fund with a 7.25% stake and Dubai-based investment fund Dubai International Capital (DIC) with an 8.55% share.