Land Secs closes EUR 416m bond in securitisation deal

UK REIT Land Securities said on Wednesday it has closed a £360 mln (EUR 416 mln) bond through the securitisation of an office property on Queen Anne's Gate in London.

The bond will be backed by the rental income from the property, which is leased to the UK government until 2018. The notes will mature in February 2027 and have been rated Aaa by Moody's and AAA by Fitch due to the direct link to the UK government. HSBC was hired to advise on the securitisation.

Land Secs said it plans to use the proceeds from the issue to 'take advantage of opportunities as the cycle turns and takes us closer to the time when we will pay down debt within our secured debt structure'.

Land Securities Group Finance Director Martin Greenslade said: 'We are pleased to have completed this fund raising which once again demonstrates the variety of our assets and the flexibility we have in our debt structure to construct innovative funding solutions. Queen Anne’s Gate was held outside our normal secured debt arrangements as we were aware that the strength of the lease would enable us to raise stand-alone financing in what is still a challenging debt market.'

Queen Anne’s Gate was built in 1977 by Land Securities and an extensive refurbishment was completed in 2008. It is located in a premier area of Central London overlooking St James’s Park and in close proximity to Buckingham Palace and the Houses of Parliament. The building is let solely to the UK government at a passing rent of £26 mln.