Mercialys to raise €150m through private placement

The fresh capital will be used for general corporate purposes.

French retail REIT Mercialys is aiming to raise €150 million of finance through a privately-placed bond issue.

“This new 10-year bond financing line, raised under very favourable conditions, helps extend the average maturity of Mercialys’s debt, while keeping the company’s financing costs at extremely competitive levels” – company statement

The notes are due to mature in 2027 and have a yield of 10-year mid-swap plus 110 basis points.

Mercialys said the fresh capital will be used for general corporate purposes. The proceeds will also fund the partial refinancing of a €479.7 million bond issue maturing in March 2019, which carries a 4.125 percent coupon.

“This new 10-year bond financing line, raised under very favourable conditions, helps extend the average maturity of Mercialys’s debt, while keeping the company’s financing costs at extremely competitive levels,” the REIT said in a statement.

Mercialys noted the bond offers “a significant spread” compared with the average capitalisation rate for the company’s real estate assets, which stood at 5.14 percent by the end of June 2017, and the pipeline’s target net yield on cost of 6.6 percent for a total investment of €586 million.

Deutsche Bank is acting as bookrunner for the issue.

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