German real estate company Grand City Properties has raised €600 million under its €1.5 billion Euro Medium Term Note (EMTN) programme to refinance or repay its existing debt.
The notes, with a maturity of nine years and a coupon of 1.375 percent, had a subscription price of 96.82 percent. The issue was three times oversubscribed, with a “very diversified” demand from sovereign funds, insurance companies and large global asset managers, the firm’s spokeswoman told Real Estate Capital.
“Grand City has always had strong access to capital markets due to its very conservative financial structure and strong global rating of BBB+,” she noted.
The firm’s conservative approach to financing – focusing on long maturities and keeping the costs to a minimum – will allow for the refinancing of part of its debt maturing in the short to mid-term, to be replaced with the new nine-year maturity series.
Medium-term notes are usually issued under a programme that allows the issuer to offer bonds occasionally without producing extensive legal documents for each issuance of notes.
With this “simplified and more flexible” issuance structure, Grand City intends to raise funds “in a more efficient process” so the firm can “react faster to market opportunities,” the spokeswoman said. “Also, through the EMTN programme, we can access a larger number of investors from various markets and currencies,” she added.
Grand City has no specific plans for additional insurance of EMTN notes this year, although the firm said it will take advantage of the EMTN in case additional capital is required at short notice.
The firm said the new issue will be admitted to trading on the regulated market of the Irish Stock Exchange. Bank of America Merrill Lynch, Citi, JPMorgan and UBS Investment Bank were the bookrunners for the issue.