Newcastle-based Grainger plc, the UK’s largest listed residential landlord, said on Monday it issued a £350 million sterling-denominated senior secured bond at a coupon of 3% for 10 years.
Proceeds from the bond sale will help with the repayment of a £200 million short-term bank facility.
The bond is rated BBB- by S&P.
Grainger also said it has continued to perform strongly since its interim results announcement on May 14, with 96% of rent collected on time during May.
On the bond sale, Grainger said: “The transaction follows the company’s successful equity raise in February 2020, and forms part of the company’s overall financing strategy to extend its debt maturity profile and align to our long-term private rented sector (PRS) investment strategy.
“Following the recent equity raise, the net proceeds from the issue of the bonds will be used to support Grainger’s strategic growth plans, enabling the business to continue to grow its PRS pipeline, and the repayment of a £200m short-term bank facility.
“The transaction will extend the company’s weighted average debt maturity profile to 6.8 years and will marginally increase the company’s average cost of debt to 3.1% on a pro forma basis.”
Grainger chief financial officer Vanessa Simms said: “We are delighted by the response to this bond issuance, which forms part of our financing strategy.
“The success of today’s transaction reflects the strength of Grainger’s business model and balance sheet, which enables us to continue with our growth strategy of providing high quality rental homes.
“Today’s transaction is an important milestone in extending our maturity profile and provides long-term interest rate certainty at an attractive coupon.
“This will enhance our funding capacity to expand our PRS pipeline further.”
Barclays Bank Plc, HSBC Bank Plc and NatWest Markets Plc acted as joint bookrunners. Rothschild & Co acted as financial adviser.