Confirmation of issue of £285,000,000 2.487% Guaranteed First Mortgage Bonds due 2031
Redemption of £61,048,148 8.5% First Mortgage Debenture Stock due 2024
Shaftesbury PLC (the "Company") confirms that Shaftesbury Carnaby PLC, a wholly-owned subsidiary of the Company, has today issued £285 million of Guaranteed First Mortgage Bonds with a coupon of 2.487% and maturity in September 2031 (the "Bonds"). The Bonds are secured on properties held by Shaftesbury Carnaby PLC and benefit from an unsecured guarantee from the Company.
The Bonds are expected to be admitted to listing on the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange on 10 October 2016. Further details of the Bonds are contained in a prospectus dated 5 October 2016 which is available for inspection at the UK Listing Authority's Document Viewing Facility, via the National Storage Mechanism.
On issue of the Bonds, the Company's existing £61,048,148 8.5% First Mortgage Debenture Stock due 2024 (the "Stock") was redeemed in full, being satisfied by existing holders of the Stock exchanging their Stock for Bonds, or taking cash. The premium for redeeming the Stock was approximately £31.1 million, equating to a reduction in the Company's EPRA NAV of 11 pence per share. The net proceeds of the issue of the Bonds, after deducting the redemption cost and expenses, amounted to approximately £189.4 million.
The issue significantly increases our financial resources for further investment in our portfolio, whilst lengthening our weighted average debt maturity to 10.8 years.
Initially, the net proceeds have reduced drawings under our revolving credit facilities, which are available to be re-drawn. The current marginal cost of these facilities is approximately 1.5% p.a. The initial reduction in our blended cost of drawn debt is 25 basis points, but as the new funds are deployed, drawings against our revolving credit facilities will reduce the blended cost further. If all contracted facilities were fully drawn, the blended cost of debt would fall by a further 65 basis points.
As previously announced, we anticipate utilising some of the proceeds, over time, to cancel interest rate swaps with a notional principal of up to £55 million, which will further reduce our blended cost of debt. The associated cost will depend upon timing and the amount of the swaps cancelled, and will be advised in due course.
Chris Ward, Finance Director, said, "We are pleased to have completed this refinancing of our existing debenture stock. Long-term finance is a natural fit with our long-term business model and portfolio of good quality assets in London's West End, which produce a resilient, and growing, income stream.
At a historically low coupon, the issue has reduced our cost of debt. As well as raising significant resources for further investment in our portfolio, it has diversified our sources of funding and extended our weighted average debt maturity. "
Invesco Asset Management Limited as agent for and on behalf of its discretionary managed clients has acquired £27,407,500 of new first mortgage bonds. This transaction is disclosed in accordance with LR11.1.10R.
IDCM Limited and Lloyds Bank plc acted as managers in respect of the issue of the Bonds.
7 October 2016
For further information:
0207 333 8118
Brian Bickell, Chief Executive
Chris Ward, Finance Director
Capital Access Group
0203 763 3400
Shaftesbury PLC is a Real Estate Investment Trust, which owns a unique real estate portfolio extending to 14 acres in the heart of London's West End - a highly popular, sought-after and prosperous destination for visitors and businesses. Our holdings are concentrated in Carnaby, Covent Garden, Chinatown, Soho and Charlotte Street.
Our objective is to deliver long-term growth in rental income, capital values and shareholder returns.
We focus on retail, restaurants and leisure in the liveliest parts of the West End. Our portfolio comprises nearly 600 shops, restaurants, cafés and pubs, extending to 1 million sq. ft., and accounting for 70% of our current income. In our locations these uses have a long record of occupier demand exceeding their availability. The portfolio also includes circa. 400,000 sq. ft. of offices and 542 apartments for rent, which provide 17% and 13%, respectively, of our current income.
In addition, we have a 50% interest in the Longmartin joint venture with The Mercers' Company, which has a long leasehold interest in St Martin's Courtyard in Covent Garden. Extending to 1.9 acres, it includes 21 shops, ten restaurants and cafés, 102,000 sq. ft. of offices and 75 apartments.
Our proven management strategy is to create and foster distinctive, attractive and prosperous locations. Its implementation is supported by an experienced management team with an innovative approach to long-term, sustainable income and value creation, and a focus on shareholder returns. We have a strong balance sheet with modest leverage.
This document may contain certain 'forward-looking' statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.
Any forward-looking statements made by, or on behalf of, Shaftesbury PLC speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Shaftesbury PLC does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
Information contained in this document relating to Shaftesbury PLC or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.
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