Segro, the European warehouse and light industrial property owner, has raised €650 mln in debt via a private placement in the US.
The UK-listed REIT signed an agreement with 13 US institutional investors for a private placement of 10-year, 12-year and 15-year senior unsecured notes.
The issue consists of three tranches: €400 mln at a fixed coupon of 1.77% due 2027, €150 mln at a fixed coupon of 2.00% due 2029, and €100 mln at a fixed coupon of 2.27% due 2032. This translates to a weighted average coupon of 1.90% and a weighted average maturity of 11.2 years.
The proceeds will be used to refinance the 2018 sterling bonds and secured debt within the Airport Property Partnership. Closing and funding of the transaction will occur in August 2017. The new issue will rank on a par with Segro's existing unsecured bank and bond debt.
Soumen Das, chief financial officer of Segro, commented: 'The support we have received from our investors for our inaugural, and well over-subscribed, US private placement debt issue is a further endorsement of the strategy we are pursuing at Segro. It will increase Segro's weighted average debt maturity to 8 years and, once drawn, will improve the company’s overall cost of debt. In addition, it broadens the range of Segro's debt providers and creates a greater natural currency hedge for our euro-denominated assets.'
Lloyds Securities and Barclays Bank acted as joint placement agents.
Segro owns or manages 6.4 million m2 of warehouses and light industrial property space, valued at £8 bn (€7 bn) in and around major cities and at key transportation hubs in the UK and in nine other European countries.
