P3 returns to the bond market with €600m issuance

The logistics firm will use the proceeds to refinance bank debt that expires in January 2025.

P3, the logistics subsidiary of Singaporean sovereign wealth fund GIC, has returned to the bond market after a two-year absence, with a €600 million green bond issuance.

“Since November, bond yields have improved by around 2 percent, half of that, roughly 1 percent, came from swaps coming down from three and a half to two and a half,” Ben Helsing, P3 group treasurer and head of debt investor relations, told Real Estate Capital Europe.

“The other 100 basis points came from the credit spreads tightening,” he noted.

The six-year bond, issued under P3’s ‘Euro Medium Term Note Programme’, will be listed on the official list of the Luxembourg Stock Exchange and traded on the Euro MTF Market. It has a fixed coupon of 4.63 percent and is rated BBB by ratings agency S&P.

“We have €50 million [of debt] maturing in October this year. We also have a €600 million [bank] loan maturing in January next year and that is where the proceeds from this bond will be used, to refinance, upfront,” Helsing said.

He explained the €600 million loan is the last outstanding facility in P3’s loan book with a guarantee from GIC. “So, after this loan has been refinanced, 100 percent of P3’s financing is non-recourse to the shareholder,” he continued.

Helsing said the firm has €4.2 billion of debt, of which only 12 percent is secured – a €450 million bank facility the firm took out in January 2023.

P3 announced in January 2022, when it issued its first green bond – a €1 billion facility in Luxembourg – that it was on a ‘sustainability journey’ to make its portfolio and future projects ‘green’. The company said sourcing green bonds meant its interests were aligned with investors’ interests.

Helsing said the €1 billion bond was split into two €500 million facilities, one with a four-year maturity and the other for seven years. Following the maturities of the two bank loans, P3’s next maturity will be in 2026.

Several real estate companies have returned to the bond market this year. In January, German housing specialist Vonovia, which is working to reduce its debt, issued its first Swiss francs-denominated bond – with a CHF 150 million (€160 million) issue size – and a debut Sterling denominated £400 million bond.

In the same month, Logicor, the logistics platform owned by sovereign wealth fund China Investment Corporation, issued €650 million of bonds under its European medium-term notes programme.