Segro arranges EUR 450m private placement

The FTSE 100 property investment and development company said the issue consisted of three tranches, being €150m at a fixed coupon of 1.35% due 2032, €50m at a fixed coupon of 1.45% due 2035, and €250m at a fixed coupon of 1.83% due 2040.

That translated to a weighted average coupon of 1.63%, and a weighted average maturity of 16.8 years.

In addition, Segro was giving notice to holders of the 6.75% sterling bonds due 2021, and the 7% sterling bonds due 2022, that it intended to redeem the outstanding amounts in full.

Segro said the combined nominal value of the bonds was £118m, and they would be redeemed for £131m during August and September.

The net proceeds from the new US private placement issue, after redeeming the bonds, would be used for general corporate purposes.

Pro forma for the position as at 30 June, and taking into account associated hedging, the impact of the transactions would be to extend Segro’s average debt maturity on a look-through basis to 10.7 years, and reduce the average cost of gross debt to 1.6%, including joint ventures at share, and excluding commitment fees and amortised costs.

“The support we have received from our existing and new investors for our third US private placement debt issue is a further endorsement of the strategy we are pursuing at Segro, reflected particularly in the long duration and low coupons of the new notes,” said chief financial officer Soumen Das.

“It will increase Segro’s weighted average debt maturity and further improve the natural currency hedge for our euro-denominated assets.”

At 0804 BST, shares in Segro were down 1.02% at 932.4p.