Unite taps bond markets for £275m unsecured issuance to finance development pipeline

By James Wallace - Tuesday, October 09, 2018 7:37

The Unite Group has secured a new 10-year, £275m unsecured sterling-denominated bond.

The bond is priced at 3.5% per annum and has received provisional investment grade rating of BBB and Baa2 by S&P and Moody’s, respectively.

The proceeds of the proposed bond issuance will be used for general corporate purposes and to fund the Unite’s development pipeline. The issuance forms part of the Unite’s overall financing strategy to further diversify its sources of funding, extend its debt maturity profile and move more of its funding to an unsecured basis.

Following the issuance, the Unite’s weighted average debt maturity will increase from 4.6 years to 5.8 years. Pro forma all in cost of debt on a fully drawn basis will reduce to 3.6%.

HSBC Bank plc and Natwest Markets acted as joint active bookrunners. Unite was advised on the bond and credit rating by Rothschild & Co.

Joe Lister, chief financial officer, said: “We are delighted to announce the launch and pricing of our new unsecured 10-year bonds. The new financing will provide increased flexibility to support our portfolio strategy as well as lengthening the maturity and reducing our overall cost of debt.”

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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