French real estate investment trust Gecina has raised €1.5 billion through a bond issue, which will partially refinance a bridge loan it used to acquire local property investor Eurosic.
The bond issue was placed in three tranches with an average coupon of 1.3 percent and an average maturity of 10 years.
Gecina issued a €500 million five-year bond with a variable coupon of 38 basis points over three-month Euribor, equivalent to a 0.5 percent coupon.
It also placed a €500 million 10-year bond with a coupon of 1.375 percent and a €500 million 15-year bond with a 2 percent coupon.
The three bond tranches were nearly four times oversubscribed by a broad base of top-tier investors, the company said. This “strong demand” – totalling around €5.5 billion – confirms the market’s confidence in the credit ratings of both Gecina and the combined unit created with Eurosic, it added.
The fresh capital is intended to refinance part of the €2.5 billion bridge financing set up for the acquisition of Eurosic. The remaining balance will be refinanced through a capital increase with preferential subscription rights for €1 billion.
On 21 June, Gecina announced its plans to buy rival real estate investment trust Eurosic. The deal creates Europe’s fourth largest real estate group, with a €19.3 billion portfolio.
The bond issues will allow Gecina to extend the average maturity of its debt, reduce its average cost and optimise its credit maturities.
BNP Paribas, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs, Morgan Stanley, Natixis, Société Générale, CM-CIC, HSBC, ING and JP Morgan were the bookrunners for the issue.