Thursday 27 April 2017

Hammerson goes to the bond market to raise €476m after Dundrum Town Centre deal

UK-listed property giant bought Project Jewel portfolio of loans tied to Dundrum and other malls
UK-listed property giant bought Project Jewel portfolio of loans tied to Dundrum and other malls
Peter Flanagan

Peter Flanagan

Hammerson has gone to the bond market to raise £350m (€476m) after its purchase of the Project Jewel portfolio of loans tied to Dundrum Town Centre and other assets.

The UK-listed property giant said the offering was two times oversubscribed. The bond matures in 2025.

In a statement, the company said the bond was priced at 173 basis points over the reference gilt and has an annual interest charge of 3.5pc.

Hammerson subsequently swapped the sterling bond nominal amount and coupon payments into euros, resulting in a net coupon cost to Hammerson of 2.5pc.

"The new coupon, post swaps, of 2.5pc is in line with our target financing costs and the proceeds of the issue will be used to enhance liquidity following the recent investment in Dublin," the company said.

The bond offering comes after Hammerson secured a bridging loan of €1bn from its banks to finance its part of the Project Jewel purchase.

Hammerson and Allianz Real Estate bought Project Jewel, which included loans tied to Dundrum Town Centre, a 50pc stake in the Ilac Centre and Pavilions Centre in Swords in north county Dublin, as well as development sites adjacent to all three centres.

The €1bn short term revolving credit facility can be replaced by longer term financing.

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

Hammerson and Allianz won the race for Project Jewel last month, beating off a host of international competition. Hammerson is now set to hold talks with Dundrum owner Chartered Land.

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