LondonMetric raises £130m through private placement

UK REIT LondonMetric, led by chief executive Andrew Jones (pictured), has raised £130 million through a private placement with four UK and US institutional investors.

The firm announced this morning (22 September) that it had entered into the private placement at a blended fixed-rate coupon of 2.7 percent and a weighted average maturity of 8.3 years.

The notes were placed with the US and UK investors in three tranches:

• £65 million 2.62 percent senior notes due 2023
• £40 million 2.72 percent senior notes due 2024
• £25 million 2.88 percent senior notes due 2028

The proceeds will be used to pay down some of the debt which has been drawn under the company’s existing unsecured credit facility, which remains available to draw in full. The firm added that the notes have the same financial covenants as the unsecured facility.

Last April, LondonMetric agreed a £400 million unsecured revolving credit facility with a syndicate of five lenders comprising Royal Bank of Scotland, Barclays Bank, Santander, Wells Fargo, and Lloyds Bank. The five-year facility carried an opening margin of 150 basis points (bps) and a minimum margin of 130 bps.

Following the private placement, LondonMetric’s weighted average debt maturity is expected to increase to 5.7 years.

“We are very pleased to have established new lending relationships with four strong institutional investors. The private placement provides further diversification of funding sources at attractive rates and allows us further capacity to increase our investments within the long let logistics market,” said Martin McGann, finance director of LondonMetric.

A handful of European property companies have gone down the private placement route recently to raise finance.

In June, German student housing specialist Deutsche Real Estate Funds (DREF) raised €63.5 million through the private placement of a euro bond. The bonds were placed with large German institutional investors.

In February, UK property investor and developer Derwent London raised more than £100 million through a US private placement with three institutional investors.