British Land launches £350m bond offering to fund recent acquisitions

British Land is scheduled to launch a £350m senior, unsecured convertible bonds offering due 2020.

The company plans to use the net proceeds to fund the £210m acquisition of One Sheldon Square, Paddington Central in April 2015, the £135m acquisition of Surrey Quays Leisure Park, Canada Water in March 2015 and to fund committed development spending.

More generally, British Land said that it believes the offering contributes to the company’s existing strong financial position while taking advantage of the current favourable market conditions to diversify its medium-term sources of finance and keep its cost of debt low.

The bonds are expected to be issued by British Land (White) 2015 Ltd, a wholly-owned subsidiary of the Company incorporated in Jersey and will be guaranteed by the company.

The bonds, which will have an expected maturity date of 9 June 2020, will be issued at par and are expected to carry a coupon of between 0.00% and 0.50% per annum payable semi-annually in arrears.

They will be subject to the satisfaction of certain conditions and will be convertible into ordinary shares of the company. The initial conversion price is expected to be set at a premium of between 20.0% and 27.5% above the volume weighted average price of the shares between launch and pricing.

Goldman Sachs, Morgan Stanley, and UBS are acting as global coordinators and Goldman Sachs, Morgan Stanley, Royal Bank of Scotland and UBS are acting as joint bookrunners. Morgan Stanley and UBS are acting as corporate brokers and advisers to British Land.

Panmure Gordon, which has a ‘buy’ rating on the stock, said: “We think this is a good transaction for the group and shareholders and would expect take up at the lower end of the pricing range.”