UK listed industrial specialist Segro has issued €650m of private placement debt with 13 institutional investors in the US.

The senior unsecured notes, which have maturities of 10, 12 and 15 years, will be used to refinance the 2018 sterling bonds and secured debt within its Airport Property Partnership (APP).

Segro, a real estate investment trust (REIT) that specialises in warehouses and light industrial property, announced in March that it was taking full control of the APP — a portfolio of property assets near London’s major airports — from joint venture partner Aviva Investors.

Soumen Das, Segro’s chief financial officer, said: “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 eight years and, once drawn, will improve the company’s overall cost of debt.”

The deal also broadens the REIT’s range of debt providers and creates a greater currency hedge for its euro-denominated assets, Das said.

The debt issue consists of three tranches: €400m carrying a 1.77% coupon due 2027; €150m with a 2% coupon due 2029, and €100m with a 2.27% coupon which will mature in 2032. 

Segro said that in weighted-average terms, the issue translated in into a coupon of 1.90% and maturity of 11.2 years.

The new issue will rank on an equal footing with Segro’s existing unsecured bank and bond debt and closing and funding of the deal will happen in August, the REIT said.

Lloyds Securities and Barclays Bank acted as joint placement agents in the deal.