Hammerson, the UK shopping centre real estate investment trust, has opted for a £1.5 billion (€1.7 billion) unsecured revolving credit facility to support its purchase of rival retail REIT, Intu Properties.
The three-year debt facility, provided by a pool of 12 banks, will be used by Hammerson to repay selected Intu debt facilities once the purchase deal closes. In December, Hammerson agreed to buy Intu in a £3.4 billion deal which is set to create the UK’s largest property group and the second largest retail owner in Europe after Unibail-Rodamco.
The loan, secured at an initial margin of 100 basis points, can only be drawn once the Intu deal completes.
The lenders in the RCF deal include Japanese bank MUFG, acting as co-ordinator for the facility, and facility agent HSBC Bank. The other members are: Bank of China (London branch), Barclays Bank, BNP Paribas, Deutsche Bank, JPMorgan Securities, Lloyds Bank, Mizuho Bank, National Westminster Bank, Santander and Wells Fargo.
“This new facility supports our acquisition of Intu and is illustrative of the future refinancing opportunities in bringing Intu’s secured debt structure onto Hammerson’s unsecured debt platform,” said Richard Sharp, group treasurer of Hammerson.
Hammerson itself has this week been the target of a proposed takeover. French shopping centre owner Klépierre made a £5 billion bid for the firm on March 19. Hammerson rejected the offer, noting it was “entirely opportunistic” and it “substantially” undervalued its portfolio.
The UK REIT also said it remains “fully committed” to pursuing the Intu deal. There are, however, concerns that Hammerson investors could vote against the merger next month.