Hammerson raises $443 million in US Private Placement transaction (US)

Hammerson announces that it has signed an agreement with nine US institutions for the placement of $443 million (approx. €325.3 million) of 7, 10 and 12 year notes, which will fund in two tranches in 2014.

The fixed rate notes are denominated in US Dollar, British Pound Sterling and Euro, with the US Dollar portion being swapped to fixed Euro. The resultant weighted average coupon is a fixed rate of 3.6%, with a weighted average maturity of 9 years and an equivalent nominal value of £277 million (approx. €166.68 million).

The attractiveness of this funding opportunity was enhanced by the ability of the US investors to defer closing, enabling Hammerson to maximize the benefit from low floating rates on its banking facilities. The funding will partly refinance upcoming bond maturities including our 2015 €480 million Eurobond which has a coupon of 4.875%.

By final drawdown in June 2014, the placement will repay existing floating rate debt and increase the proportion of the Group’s fixed rate debt by approximately 13% (72% fixed at 30 September 2013). The financing will also extend the weighted average debt maturity by approximately 0.4 years (5.9 years at 30 September 2013). Bank of America Merrill Lynch, JP Morgan and Barclays acted as agents on this transaction.

Timon Drakesmith, Chief Financial Officer of Hammerson, commented: “This financing locks in long-dated funding with appealing coupons, whilst the flexible terms allow us to retain the immediate benefits of low floating rates. Being Hammerson’s debut issuance into this market, we are delighted to have created new debt investor relationships to further diversify our sources of finance and build on our strong liquidity position.”

Source: Hammerson

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