SEGRO enters finance deal worth €460 million

SEGRO plc, Europe’s leading owner-manager and developer of industrial and warehouse property, announced that it has agreed new and amended bank facilities totaling €460 million (£380 million). 

These comprise:

i)   a new €225 million (£186 million) revolving multi-currency, five year syndicated bank facility, replacing existing facilities totaling €395 million; and,

ii)  an existing revolving multi-currency syndicated bank facility which has been amended and extended to: a) reduce the margin and commitment fees in the facility; b) reduce the size of the facility from €385 million to €235 million (£194 million); and, c) extend the maturity of the facility by 18 months to May 2018.  

The initial margin payable under both the above facilities is 125 basis points. This is c25 basis points lower than the average bank margin payable by the Group prior to this refinancing. The other principal terms and conditions of the facilities are in line with those previously contained in the Group’s unsecured bank financing.

The new facility has been put in place with a strong group of relationship banks. The lenders are: Barclays Bank PLC; Bank of China Limited, London Branch;  BNP Paribas; HSBC Bank plc; Lloyds Bank plc; KBC Bank NV - London Branch; Santander Global Banking & Markets (all Mandated Lead Arrangers and Bookrunners); plus Bank of America Merrill Lynch (as Lead Arranger).

The lenders under the amended facility are unchanged and include six of the banks mentioned above and The Royal Bank of Scotland Plc and JPMorgan Chase Bank, N.A. – London Branch. BNP Paribas acted as Documentation Coordinator for both facilities.

As a result of putting the new bank facility in place, SEGRO has cancelled in full a €240 million syndicated facility which was due to mature in December 2015, a €100 million bilateral facility which was to mature in July 2014 and a €55 million bilateral facility maturing in November 2016.  

The benefits of these transactions are:

i)    Reduced pricing of the Group’s unsecured bank facilities, taking advantage of both improved loan market conditions and the Group’s improved credit strength;

ii)   The creation of a longer dated and smoother debt maturity profile. Through these new facilities, the weighted average maturity of the Group’s unsecured bank facilities has been extended from two years to over four years; and,

iii)   A reduction in the Group’s unsecured committed bank facilities of €320 million (£264 million), decreasing (in combination with the margin reduction) annualized commitment fees (assuming the facilities remain undrawn) by c£2 million.

Commenting on these transactions, Justin Read, SEGRO’s Group Finance Director, said: “The signing of these facilities demonstrates the ongoing support of our relationship banks for SEGRO and its strategy and we look forward to continuing to work with them in the future.

“This refinancing makes our committed bank facilities more cost effective, whilst improving the debt maturity profile of the Group. The restructured facilities will also provide an appropriate level of unsecured bank funding to support the ongoing delivery of our strategy, whilst ensuring that SEGRO continues to maintain a strong liquidity position.” 

Source: SEGRO

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