UK REIT Segro has arranged a US private placement of €225 mln 15 and 20 year senior unsecured notes with a group of institutional investors.
The issue consists of two tranches, both of which will be drawn down in September 2022. The firm will issue a €50 mln bond at a fixed coupon of 3.87% due 2037; and subsequently, €175 mln worth of notes will be issued at a fixed coupon of 4.14% due 2042.
This translates to a weighted average coupon of 4.08% and a weighted average maturity of 18.9 years.
Assuming that the debt is fully drawn, Segro’s average debt maturity is 8.6 years (31 March 2022: 7.8 years) and the average cost of gross debt is 1.7% (31 March 2022: 1.6%). The percentage of fixed rate debt is 76% (31 March 2022: 66 per cent).
Soumen Das, Chief Financial Officer of Segro, commented: ‘The support we have received from our existing investors for our fourth US private placement debt issue is a further endorsement of the strategy we are pursuing at Segro, reflected particularly in the long duration of the new notes. It will have a marginal impact on the average cost of debt, while increasing the percentage of debt which is at fixed rates at a time of interest rate volatility.’
