£360m revolving credit for Hammerson
UK PROPERTY group Hammerson has agreed on a £360 million (R6.03 billion) unsecured revolving credit facility (RCF) in an effort to reduce its debt financing costs and lock in historically low borrowing costs.
The FTSE 100 group said it had signed a five-year revolving credit facility deal with a syndicate of 14 banks.
The group said the new facility could be extended to seven years and would refinance the existing £175m RCF that would mature in April 2018. It said the new facility would reduce the current margin of 150 basis points by 60 basis points.
Hammerson said this would see the existing facility cancelled resulting in a net increase of £185m of available bank facilities and increasing total bank facilities to £1.2bn.
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.”
The refinancing follows a £400m private placement in January.
“The commercial terms of the new facility are the same as Hammerson’s two other RCFs (a £415m RCF signed in April 2015 and a £420m RCF signed in April 2016) and include Hammerson’s standard unsecured financial covenants,” the group said.
Hammerson, which focuses on retail property around Europe and has a £9bn portfolio, suffered a profit drop of more than 50 percent last year on the back of the falling value of its shopping centres and retail parks. In 2016, the company signed a £420m credit deal which also helped reduce its borrowing costs. The landlord has been refinancing debts built up during its acquisition of Birmingham’s Grand Central shopping centre in 2015.
New loan Japanese bank MUFG will co-ordinate the new loan facility with Deutsche Bank while BNP Paribas, First Commercial Bank, ICBC, JP Morgan, The Royal Bank of Scotland and Wells Fargo Bank will be appointed mandated lead arrangers and book runners.
Hammerson owns some of the leading shopping centres across the UK. The company also owns a portfolio of UK retail parks and shopping The value of Hammerson’s property portfolio in the UK and around Europe centres in France, as well as premium outlet centres in other European countries. Hammerson gained exposure to Ireland, acquiring a stake in a portfolio of retail assets towards the end of 2015, which included that country’s largest shopping centre, Dundrum.
Hammerson has its primary listing on the London Stock Exchange and a secondary inward listing on the Johannesburg Stock Exchange. Hammerson shares closed 0.9 percent lower on the JSE on Friday at R99.29.