Kennedy Wilson Europe Real Estate (KWE) has closed its £300m debut senior unsecured bond with an effective coupon of 3.35%.
The seven-year bond, rated BBB by Standard & Poor’s, has an annual fixed coupon of 3.95% to the company. The coupon was effectively reduced to 3.35%, 10 bps lower than expected, as a result of KWE entering into swap arrangements to convert 50% of the proceeds into euros.
Mary Ricks, president and chief executive of KWE, said: “We are very pleased to have closed our inaugural unsecured bond which provides the business with flexible capital which will be accretive to our acquisition strategy.”
The bond, which was launched last week, allowed KWE to access the unsecured debt capital markets as it sought to diversify its funding sources. It extended the maturity of KWE’s debt while moving to a more flexible corporate debt structure.
The bond will be listed on the regulated market of the London Stock Exchange.
KWE successfully raised £351.5m through a share issue last October. New shares were issued at a price of £10.06 through a firm placing and an open offer, increasing the share capital of the firm by 35%.
In the latest issue, JP Morgan Cazenove acted as global coordinator for the bond. Bank of America Merrill Lynch, Deutsche Bank and JP Morgan Cazenove acted as joint lead managers. JP Morgan Cazenove was sole adviser on KWE’s rating analysis.