Hammerson announces successful launch of GBP350m bond

Property development and investment company Hammerson has successfully launched and priced a ten-year, £350m bond maturing in 2015.

The bond was priced at 173 basis points over the reference gilt and has an annual coupon of 3.5%.

Hammerson said the issue was more than two times oversubscribed and the company subsequently swapped the sterling bond nominal amount and coupon payments into euros resulting in a net coupon cost to Hammerson of 2.5%.

The new coupon, post swaps, of 2.5% is in line with Hammerson’s target financing costs and the proceeds of the issue will be used to enhance liquidity following the recent investment in Dublin.

Late last month, Hammerson and its joint venture partner Allianz Real Estate signed an agreement with Ireland’s National Asset Management Agency to acquire the Project Jewel portfolio of loans secured against retail assets in Dublin for €1.85bn or £1.37bn.

The tenor of ten years is longer than Hammerson's recent euro bond issues and will extend the weighted average maturity of debt by approximately one year.

Chief financial officer Timon Drakesmith said: "This transaction is the first sterling bond issue by Hammerson for almost ten years and represents a welcome return to a home funding market.

“We are appreciative of the support shown by our key bond investors and our relationship banks have assisted in swapping the coupon to a low 2.5% level in euros."