Hammerson has signed a £360m unsecured revolving credit facility with a syndicate of 14 lenders, including five Asian banks that had never previously lent to the company.
The deal was secured at a margin of only 90 basis points (bps), which is understood to be one of the lowest margins to be achieved by a UK property company for a comparable facility and provides evidence that debt pricing has not moved significantly since the EU referendum.
MUFG, otherwise known as the Bank of Tokyo-Mitsubishi, acted as co-ordinator for the facility, which helped to unlock the new banking relationships for Hammerson in the Far East.
The new lenders to the retail property giant comprise ICBC, Agricultural Bank of China, Bank of Taiwan, First Commercial Bank and Hua Nan Commercial Bank.
The facility, which has a maturity of five years and may be extended to a maximum of seven, will be used to refinance an existing £175m revolving credit facility that was due to mature in April 2018.
The old facility had a margin of 150bps, so the refinancing will result in a margin reduction of 60bps.
“This credit facility is the latest milestone in our journey to reduce Hammerson’s cost of debt by refinancing in an attractive funding environment,” said Timon Drakesmith, chief financial officer of Hammerson.
It comes after Hammerson agreed last November what is understood to be the largest US private placement by a UK property company. The agreement with 11 institutional investors from the US and the UK was for the issue of £400m of private placement notes.
Hammerson has two other revolving credit facilities of £415m and £420m that were extended by one year this month. As a result of these deals and the latest refinancing, Hammerson’s weighted average maturity of debt has increased from 5.5 years at the end of 2016 to 6.4 years on a pro forma basis.
23 March 2017
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