French REIT Gecina has placed a €500m, nine-year bond carrying a coupon of 2%, 115bps over the mid-swap rate.
The latest issue was taken up by a large pan-European base, the company said. The funds will be used to refinance some of the corporate credit facilities related to last week’s €1.24bn purchase of two landmark office assets in Paris from Ivanhoé Cambridge: PSA group’s historic headquarters in central Paris near L’Arc de Triomphe and the T1&B towers in La Défense.
Barclays was the global coordinator, with Barclays, Crédit Agricole CIB, Morgan Stanley and Société Générale CIB as joint book runners.
Gecina’s previous issue, in January, of another €500m bond with a 10 year maturity, achieved an 85bps spread and a coupon of 1.50%, the lowest to date for both on an issue by the company.
Gecina is France’s second-largest listed real estate company and its portfolio of offices, student housing and healthcare, 90% of it in the Paris region, was valued at €10.3bn at end-December 2014. The plan is to redevelop the 33,600 sq. m. PSA building, whose tenant PSA/Peugeot-Citroen will move out of its central Paris headquarters in 2017 to the city’s western suburbs as part of a cost-saving push.
Over the last year Gecina has raised €1.5bn in three bond issues maturing in 2021, 2024 and 2025, at an average 97bps spread and a 1.75% coupon. In the first quarter of this year, it also fully redeemed an issue of convertible ORNANE bonds and renegotiated nearly €1bn of undrawn credit lines, extending the maturity of its debt to over six six years. The company’s target is to reduce its average cost of debt by at least 40bps in 2015; the latest bond issue will help with this and extend the average maturity as well.