British Land closes £350m bond offer with 0% coupon

British Land has launched a £350m offer of senior, unsecured convertible bonds to help fund recent London purchases. In a statement to the London Stock Exchange, the UK REIT said the bonds have a maturity date of 9 June 2020 and are expected to carry a coupon of between 0.00% and 0.50%. They will be convertible into ordinary shares of the company.

British Land has closed its £350m offer of senior, unsecured convertible bonds to help fund its recent London purchases with a 0% coupon.

British Land logo for useIn a statement to the London Stock Exchange, the UK REIT said the bonds have a maturity date of 9 June 2020. They will be convertible into ordinary shares at 1103.32p, a premium of 27.5% above the price of those shares between launch and pricing.

Lucinda Bell, chief financial officer at British Land, said: “Taking advantage of favourable market conditions, we have raised funds at a zero coupon with flexible settlement options. This financing continues our strong track record in accessing funding on competitive terms from a range of sources.”

The bond issue will fund the £210m purchase in April of One Sheldon Square, Paddington, and the £135m acquisition in March of Surrey Quays Leisure Park, Canada Water. It will also support committed development spending.

British Land said: “The offering contributes to the company’s existing strong financial position while also taking advantage of the current favourable market conditions to diversify its medium term sources of finance and keep its cost of debt low.”

The shares underlying the bonds represent 3.08% – 3.28% of British Land’s issued share capital immediately prior to the offering.

Paddington Central
Paddington Central

The firm said its £210m purchase of One Sheldon Square was a strategic acquisition to increase its ownership interest at its Paddington Central office-led campus. One Sheldon Square is fully let on a total annual contracted rent of £9m. Positioned at the entrance to the campus, it gives the company control over a key point of access to Paddington Central.

Its Surrey Quays Leisure Park purchase completed a 46-acre site at Canada Water, assembled in four transactions over five years. The regeneration of the site could comprise up to 7m sq ft of office, retail, residential and leisure space.

Goldman Sachs, Morgan Stanley and UBS are acting as global co-ordinators. Goldman Sachs, Morgan Stanley, RBS and UBS are acting as joint bookrunners. Morgan Stanley and UBS are acting as corporate brokers and advisers to British Land.

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