Capco raises £175m through US private placement

Capital & Counties Properties (Capco), the listed central London-focussed developer and investor, has raised £175 million through a US private placement.

Capco subsidiary Covent Garden Group Holdings Limited, the holding company for the firm’s properties in London’s Covent Garden area, signed the agreement with five US institutional investors.

The deal comprises senior unsecured notes of 10 and 12 year terms.

The first tranche comprises £125 million at a fixed coupon of 2.28 percent due 2026. The second tranche comprises £50 million of notes priced at a fixed rate of 2.37 percent due 2028.

Capco said that the proceeds will “strengthen the group’s capital structure and provide greater financial flexibility and resources”.

Initially, proceeds will be used to partially repay a £705 million bank revolving credit facility signed in December 2015, which is due for repayment in December 2020.

This is the second time that Capco has raised money through a US private placement. In December 2014, the firm raised £150 million through its Covent Garden subsidiary, also with five US investors. That issue consisted of £75 million of notes priced at 3.68 percent and £75 million at 3.68 percent.

“We have benefitted from the all-time low gilt rates to lock in long-term debt which extends Capco’s weighted average debt maturity to 5.7 years, and increases our available facilities by £175 million at a highly attractive weighted average coupon of 2.3 percent,” said Soumen Das, chief financial officer of Capco.

Last week, another London property company, LondonMetric, turned to the private placement market to raise capital. The REIT raised £130 million through a private placement with four UK and US institutional investors.