Merlin Properties Socimi, the largest real estate company listed on the Spanish Stock Exchange, has issued €800 mln of bonds in the Euromarket with a 10-year maturity.
The unsubordinated ordinary bonds have an issue price of 98.931% of nominal value, and an annual coupon of 1.875%.
'Through this transaction, debt maturities for the next five years have been reduced to a minimum and our exposure to interest rate rises represents less than 10% of our debt,' commented Ismael Clemente, Merlin's president (pictured).
'Merlin increases its annual free cash flow to shareholders and is hedged against future upwards movements in interest rates,' Clemente added.
Subscription and payment for the notes is expected on 2 November 2016.
The bonds, which are subject to English law, are also expected to be admitted to listing on the Luxembourg Stock Exchange.
The proceedings will be used to repay Merlin's outstanding €500 mln bridge to bond facility signed with Metrovacesa in April, maturing April 2018, as well as for general corporate purposes.
Merlin said the issue further optimised its capital structure, extending its average debt maturity from 5.7 to 6.8 years, while raising fixed-rate debt to 91.8% from 80.7%. The company's average cost of debt is now 2.28%.
