HB Reavis issues largest bond to date

HB Reavis has raised PLN 220 million (€51.9 million; $60.3 million) from the issue of a new tranche of its PLN 500 million Polish bond programme.

HB Reavis has raised 220 million zloty (€51.9 million; $60.3 million) from the issue of a new tranche of its 500 million zloty Polish bond programme.

The Central and Eastern Europe-focused property developer said the issue was the largest in its 24-year history. The proceeds from this latest tranche is intended to support the company’s international acquisition and development strategy, said HB Reavis.

The securities attracted demand from a significant number of returning investors, as well as new parties. According to HB Reavis, 70 percent of the bonds were taken up by investment funds, 18 percent by banks and the remaining 12 percent by private banking clients.

The four-and-a-half-year bonds have a floating annual coupon with a spread of 4.2 percent above six-month Wibor and, once swapped into a euros-denominated fixed-rate, the latest tranche carries an annual cost of corporate debt at 4.05 percent. The bonds were arranged by Warsaw-based banks mBank and Haitong Bank.

HB Reavis’s latest bond issue not only represents the largest tranche in the firm’s history, but also the largest bond issue achieved by a commercial real estate developer in Poland this year.

Marian Herman, group chief financial officer at HB Reavis, said the interest in the bond issue exceeded the firm’s expectations and strengthened its reputation among investors in the Polish bond market.

“We are very pleased to see a large number of recurring investors as well as welcome new investors who decided to invest in HB Reavis credit for the first time,” added Herman.

While Przemyslaw Gdanski, management board member at mBank, said the bond issue was even more impressive because it was achieved without the participation of pension funds.

“Just as predicted, the Polish capital market has proven to have high absorption capacity, which supported the successful placement of the offering and made this the largest issue in Poland by a commercial real estate developer so far this year,” added Gdanski.

The second tranche of bonds brings the total raised so far to 320 million zloty, following HB Reavis’s opening issue in late 2016.