Following the successful issuance of its 12-year £400m bond, Hammerson sets out the final outcome of the new issuance and accompanying tender of the Company’s outstanding bonds maturing in 2026 and 2028:
- 12-year £400m bond pricing confirmed on 3 October at a coupon of 5.875% representing a spread of 183 basis points over the reference gilt rate
- Strong demand led to peak order book in excess of £2.6bn (over 7x subscribed)
- The repurchase of a total of £411.6m bonds, comprising £168.4m of 6% 2026s and £243.2m of 7.25% 2028s
- An annualised net interest benefit to Hammerson of £3.6m1 per year (approximately £0.8m for the financial year ending 2024)
- This reduces weighted average gross interest from 3.8%2 to 3.6% and extends Hammerson’s weighted average debt maturity from 2.9 years3 to 5.2 years
- The refinancing is largely leverage neutral; pro forma4 LTV at 30 June 2024 is 25.5% and net debt:EBITDA is 5.4x
Himanshu Raja, CFO of Hammerson plc, commented:
“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. 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.”
1 Annualised interest benefit arises due to the weighted average interest cost on the bonds tendered (6% on 2026s and 7.87% on 2028s) being 7.1% and higher than the 5.875% coupon on the new issue, offset by the impact of new issue discounts and the reduction to interest receivable due to net cash outflows.
2 Weighted average gross interest rate at 30 June 2024 of 3.4% and pro forma for the refinancing of Dundrum in August 2024 of 3.8%.
3 Weighted average debt maturity at 30 June 2024 of 2.2 years and pro forma for the refinancing of Dundrum in August 2024 of 2.9 years.
4 Pro forma for the tender and new issuance financing transactions and the disposal of the Group’s interest in Value Retail generating net proceeds of £583m. Pro forma at 30 June 2024 reflecting only the disposal of the Group’s interest in Value Retail; LTV was 24.7% and net debt:EBITDA was 5.3x.