Hammerson secures £360m loan from bank syndicate

Property developer Hammerson has secured a £360m loan at an initial margin of 90 basis points from a syndicate of fourteen banks in a bid to reduce its debt.

The revolving credit facility has a maturity of five years, which may be extended to a maximum of seven years, and will refinance an existing £175m facility maturing in April 2018.

The existing facility, which will be cancelled resulting in £185m increase of available bank facilities and increasing total bank facilities to £1.2bn, had a margin of 150 basis points, so the new facility will result in a reduced margin of 60 basis points.

FTSE 100 Hammerson said that this was the latest in a sequence of recent transactions by the company to reinforce the financial position of the group and extend the maturity of debt.

In January, the company raised £400m from a private placement and it other £415m and £420m facilities were extended by one year in early April, while the €1.5bn short-term loan raised in order to buy businesses in Ireland and Birmingham has now been fully repaid.

This now means the company’s weighted average maturity of debt has been extended from 5.5 years at the end of 2016 to 6.4 years on a pro forma basis.

The syndicate of banks providing the loan include Deutsche Bank, BNP Paribas, First Commercial, JP Morgan, the Royal Bank of Scotland, Wells Fargo, Agricultural Bank of China, and the Bank of China.

Hammerson chief executive Timon Drakesmith said: "This new credit facility is the latest milestone in our journey to reduce Hammerson's cost of debt by refinancing in an attractive funding environment.

“I am particularly delighted to welcome five new banks into our relationship group and appreciate the support from major institutions from Asia, US and Europe."