Kennedy Wilson Europe Real Estate is to launch a second bond issue in a continuing drive to take advantage of the low cost of long-term senior debt.
The listed European investor announced the issuance of €300m of senior unsecured notes with a maturity of 10 years paying an annual fixed coupon of 3.25%.
This is fractionally less than the 3.35% cost of debt the company raised in June this year in its debut, £300m senior secured bond. That issue pays 3.95% but the coupon was effectively reduced to 3.35% by Kennedy Wilson taking out swaps to convert 50% of the proceeds into euros.
The latest notes are issued under the company’s Euro Medium Term Note (EMTN) programme which is rated BBB Standard & Poor’s which is expected to assign the same rating to the notes.
Company president and CEO Mary Ricks said it “allows KWE to further diversify its funding sources and to access the Euro debt capital markets which aligns with our committed acquisitions and investment pipeline.
“The 10-year terms further staggers our debt maturities, increasing the overall weighted average term to maturity to 5.8 years and cost of debt to 2.9%.”
Issue and settlement is expected by 12 November. Morgan Stanley is sold book runner and underwriter. JP Morgan Cazenove, BofAML and Deutsche Bank are co-lead managers.