British Land takes US bonds route to raise $480m

UK property companies continue to be active in the US private placement market. British Land is planning to raise about $480m by placing  a series of bonds in the US. It is rumoured that at least one of the landed estates that recently raised capital this way – Howard de Walden, Cadogan and Grosvenor – may return to the market.

British Land’s bonds, with maturities ranging from seven to 15 years, are likely to cost around 150 basis points over Libor. RBS and HSBC are the joint book runners on the issue. US investors’ high demand for privately placed bonds makes the pricing attractive for British Land compared with the rates available on bank debt.

The company had aimed to place $200m of bonds, but the fund raising was increased on the back of strong demand for the product. Meanwhile, German investor IFM Immobilien plans to issue a €25m convertible bond to raise capital for office and retail acquisitions or developments.

Close Brothers Seydler Bank will coordinate the deal. BHF Bank will be co-lead manager. IFM Immobilien hopes to use the proceeds to help boost its  portfolio value from €400m to €500m in the medium term.