SEGRO plc (‘SEGRO’), in its role as venture advisor to the SEGRO European Logistics Partnership (‘SELP’) joint venture, announces the launch and pricing of a seven year, €500m (£446m) unsecured bond issue for SELP. The bonds were priced at 120 basis points above the euro mid swap rate and have an annual coupon of 1.25 per cent.
The proceeds of the issue will principally be used to prepay the majority of SELP’s secured bank facilities.
SELP was formed in October 2013 and, at 30 June 2016, had a gross asset value of €2.25bn. It has a long-term debt rating of Baa2 (stable outlook) by Moody’s Investor Service Ltd and BBB+ (stable outlook) by Fitch Ratings Ltd and the bonds are expected to be rated in line with these. BNP Paribas, Morgan Stanley and The Royal Bank of Scotland acted as Joint Lead Managers on the transaction.
As part of the refinancing exercise, SELP has also agreed in principle a €200m revolving credit facility with BNP Paribas and The Royal Bank of Scotland.
The combined impact of the refinancing exercise is expected to reduce the all-in cost of third party financing in SELP by approximately 110 basis points from 2.7 per cent currently.
Justin Read, Group Finance Director of SEGRO, said: “We are very pleased by the depth and breadth of support for this inaugural SELP bond issue which is testament to the high quality assets and cash flows of the joint venture. The issue allows SELP to finance itself both at a lower cost and more efficiently.”
