Unibail-Rodamco has raised €1 bn to optimise the maturity and the cost of its debt through two placements: a €500 mln 'green bond' with a record low coupon and a similarly sized convertible bond with a record long maturity.
Unibail-Rodamco has raised €1 bn to optimise the maturity and the cost of its debt through two placements: a €500 mln 'green bond' with a record low coupon and a similarly sized convertible bond with a record long maturity.
Europe's largest listed property company simultaneously launched a tender offer for nine of its outstanding bonds and a repurchase procedure for the €750 mln convertible bond issued in 2012.
The bond repurchase is being facilitated by Unibail-Rodamco's second 'green bond' and the convertible bonds issuances. The two issues, totalling €1 bn, attracted €5 bn of demand.
The €500 mln green bond has a 10-year maturity and a coupon of 1%, which Unibail-Rodamco said is a record low level for a bond issued by the group. The convertible bond has a 15-year maturity, the longest maturity ever for a real estate company in the euro market, and a coupon of 1.375%, according to the company.
Unibail-Rodamco also announced the successful placement of a €500 mln Ornane bond, due on 1 January 2022. The transaction was six times oversubscribed and is the first convertible bond with a negative yield issued by a real estate company in the euro market.
The exercise price is €346.87, reflecting a 37% premium to the volume weighted average of Unibail-Rodamco's share price on the day of the issue.
Bond buyback
Unibail-Rodamco's tender offers relate to a total of €1.5 bn of bonds issued by the company, with maturity dates in April 2016, September 2016, June 2017, December 2017, August 2018, October 2018, March 2019, November 2020 and February 2021.
The tender offer period is expected to end on 14 April 2015.
'These transactions are part of the proactive management of Unibail-Rodamco's balance sheet, which aims to extend the average maturity of its debt, diversify its funding sources and optimise its cost of debt,' the company said in a statement.
Euronext-listed Unibail-Rodamco has over €34 bn of real estate under management, consisting of over 70 prime shopping centre in large European cities, as well as office buildings and convention centres in Paris.
Klépierre
On Thursday, Klépierre, a fellow Euronext shopping centre landlord, placed an eight-year, €750 mln bond, maturing on 17 April 2023.The bond was priced at 65 basis points above the swap rate which translates into a coupon of 1%.
Simultaneously, Klépierre launched a cash tender offer on a €500 mln bond issued by Netherlands-based European shopping centre owner Corio. The offer period is expected to end on 16 April.
Klépierre completed its takeover of Corio at end-March. 'These transactions aim at optimising the debt profile of the group while reducing its cost of funding,' Klépierre said in a statement.
The combined group manages a European shopping centre portfolio valued at over €21 bn.
