Hammerson upbeat on completion of refinancing transactions

The FTSE 250 company issued a 12-year, £400m bond, priced at a 5.875% coupon, representing a spread of 183 basis points over the reference gilt rate.

Strong demand for the bond saw the order book peak at over £2.6bn - more than seven times subscribed.

As part of the refinancing, Hammerson said it repurchased £411.6m of its outstanding bonds, including £168.4m of its 6% bonds due in 2026 and £243.2m of its 7.25% bonds due in 2028.

That, the board said, would generate an annualised net interest benefit of £3.6m, including an estimated £0.8m benefit for the financial year ending 2024.

The refinancing reduced Hammerson’s weighted average gross interest rate from 3.8% to 3.6%, and extended its weighted average debt maturity from 2.9 years to 5.2 years.

It said the refinancing remained largely leverage neutral, with Hammerson’s pro forma loan-to-value ratio standing at 25.5% as of 30 June, and net debt to EBITDA at 5.4x.

“The combined effect of our new £400m 5.875% bond maturing in 2036 and the tender of our existing short-dated sterling maturities reduces our ongoing interest costs and extends our weighted average debt maturity,” said chief financial officer Himanshu Raja.

“The strong demand and competitive pricing are a clear recognition from investors of the strength of our portfolio, the robust balance sheet and the opportunity ahead of us.”

At 0837 BST, shares in Hammerson were up 0.84% at 311p.

Reporting by Josh White for Sharecast.com.