Fourth US private placement nets $480m for British Land

Howard de Walden estate also returns to US market with £147m issue

Two more issuers have raised debt capital in the US private placement market in the past few weeks. British Land priced a placement in June and closed and drew $480m on 1 September, while the Howard de Walden estate returned to the market last month, raising £147m.

The issues follow a string of others since July 2010, with landed estates Grosvenor and Cadogan, and Great Portland Estates also taking advantage of the market’s re-opening then. British Land’s placement, launched at $200m, was increased after the issue was three times oversubscribed.

Some of the 12 investors also took part in British Land’s three previous private placements. The finance was swapped to £300m at an average floating rate of 146bps over Libor. Simon Carter, British Land’s head of treasury and capital markets, said that though the REIT “has a wide range of markets open to us, the key pillars (for this issue) were diversification and mitigation of maturities”.

The average cost of the Howard de Walden issue was 4.5%, with the landed estate also swapping from dollars into sterling with seven of the eight investors, but issuing in sterling to the eighth, UK-based Aviva. The three tranches have 10, 12 and 15-year maturities.

Toby Shannon, the landed estate’s chief executive, said: “We had a £250m revolving credit facility and we wanted to switch to a higher amount of fixed, long-term finance.” RBS was agent to both issuers; HSBC was joint issuer to British Land while Lloyds provided the hedge underwriting.

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