German listed property firm Vonovia has announced the issue of its first bond in pounds sterling. The unsecured bond, with a term of 12 years, has a volume of £400 mln (€465 mln) and bears a coupon of 4.5% after cross currency swap.
By entering the Anglo-Saxon capital market, Vonovia is gaining access to new investors and will benefit from arbitrage opportunities, the company said in a statement.
The issue was oversubscribed 8.3 times, with the order book amounting to £3.45 bn at its peak, making it the largest cross-sector corporate order book in sterling since June 2020.
‘The high demand is further proof of our excellent access to the international capital market. The time is right to return to the bond market. So we’re making use of an attractive window of opportunities in the market,’ said Philip Grosse, CFO of Vonovia.
While Vonovia focused entirely on secured borrowings in 2023, it is now taking advantage of the attractive conditions for unsecured capital, it added. 'Since December, interest rates and spreads have developed in a way that makes financial bonds competitive again. With our debut on the UK market, we’ve also leveraged some significant arbitrage opportunities of around 30 base points compared with Eurobonds,' Philip Grosse added.
Vonovia intends to use this additional liquidity to repay loans that become due from 2025 onwards.
