Pan-European retail property fund Vastned Retail has placed a EUR 75 mln unsecured bond with a single major US institutional. This is Vastned Retail's first transaction in the US private placement market.

Pan-European retail property fund Vastned Retail has placed a EUR 75 mln unsecured bond with a single major US institutional. This is Vastned Retail's first transaction in the US private placement market.

Vastned Retail said that the bond issue reduces its dependency on the regular bank debt market and increases the maturity of its debt portfolio.

The notes of the bond were issued in two equal tranches of EUR 37.5 mln, with maturities of seven and 10 years. The coupons were priced at a fixed rate of 4.79% and 5.46% respectively. The proceeds will primarily be used to redeem short-term debt. Vastned Retail's interest policy is to have approximately two third of its loan portfolio at a fixed interest rate.

With a market capitalisation of EUR 950 mln, Amsterdam-listed REIT Vastned Retail owns a portfolio of high street retail and shopping centre properties located primarily in the Netherlands, Belgium, France and Spain, valued at EUR 2 bn.

CBRE acted as placing agent for the bond issue.

Robin Hubbard, executive director of CBRE, commented: 'This transaction signals the reopening of the debt private placement market for European property companies. We expect this channel to increasingly become an attractive source of long-term unsecured debt for unrated, but good quality, borrowers like VastNed Retail.'

' We are very pleased to enter the private placement market as it enables us to diversify our lending base and to extend our debt maturity profile,' said Tom de Witte, chief Financial officer of Vastned Retail.

Unlike many property investment companies, which tend to borrow on a secured basis using traditional mortgage-finance, Vastned Retail's notes were unsecured. ' Attracting such long-term unsecured financing required translating the specifics of an asset-focused business to a corporate finance-oriented debt market. The quality and diversity of VastNed Retail’s property portfolio allowed us to successfully place its debut issue,' commented Robert-Jan Peters, associate director in CBRE's Amsterdam office.