Derwent London raises £105m from US private placement

Property investor and developer Derwent London has raised more than £100 million of new finance through a US private placement with three institutional investors.

Property investor and developer Derwent London has raised more than £100 million of new finance through a US private placement with three institutional investors.

The REIT announced this morning (25 February) that it has entered into £105 million of new unsecured fixed-rate privately-placed bonds with 12 and 15-year maturities. The issue is in two tranches, which will both be drawn down on 4 May.

The first tranche is £30 million of 3.64 percent senior notes due 4 May 2028, while the second is £75 million of 3.57 percent senior notes due 4 May 2031. Derwent London said that the three institutional investors which purchased the notes are all new lending relationships for the firm.

derwentlondon_logoThe debt issue was priced on 4 February and the note purchase agreement was signed on 19 February.

“We are delighted to welcome three new funding relationships to our pool of lenders and extend our available facilities by £105 million,” said Damian Wisniewski, finance director of Derwent London. “With a December 2015 loan-to-value ratio of just under 18 percent and a strong increase in earnings cover during 2015, the group is well placed to fund its pipeline of value-enhancing projects and to continue growing earnings. When drawn in May, this long-term debt will also increase the group’s weighted average maturity of borrowings by about 12 months.”

Derwent London said that it will use the funds for general corporate purposes and to refinance existing debt. The private placement takes the group’s total debt facilities to £1.266 billion.

The financial covenants of the deal are in line with the group’s other unsecured facilities, including a £100 million US private placement arranged in November 2013.

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