Bullring owner agrees new £360m finance deal
Retail property company Hammerson – part-owner of Birmingham’s Grand Central and Bullring – has agreed a new £360m funding deal as it looks to reduce borrowing costs.
The company has signed an unsecured Revolving Credit Facility at an initial margin of 90 basis points with a syndicate of 14 international banks. The facility has a maturity of five years, which may be extended to a maximum of seven years.
The new facility will refinance an existing £175m RCF due to mature next April. This existing facility featured a margin of 150 basis points, so the new facility will result in a reduced margin of 60 basis points.
The existing facility will be cancelled, resulting in a net increase of £185m of available bank facilities and increasing total bank facilities to £1.2bn. The commercial terms of the new facility are the same as Hammerson’s two other RCFs (a £415m RCF signed in April 2015 and a £420m RCF signed in April 2016) and include Hammerson’s standard unsecured financial covenants.
The agreement is the latest in a sequence of recent transactions by Hammerson as it looks to reinforce its financial position and extend the maturity of its debt.
The £400m private placement funded in January and both the £415m and £420m RCFs were extended by one year earlier this month. The €1.5bn short-term facility raised for acquisitions in Ireland and Birmingham has now been fully repaid.
MUFG acted as coordinator for the facility and Deutsche Bank was appointed as facility agent.
BNP Paribas, First Commercial Bank, ICBC (London), J.P. Morgan, Royal Bank of Scotland and Wells Fargo Bank were appointed mandated lead arrangers and bookrunners.
Commitments were also provided by Agricultural Bank of China (UK, Bank of China – London branch, Bank of Taiwan – London branch, Chang Hwa Commercial Bank – London branch, CIC and Hua Nan Commercial Bank – London branch.
Timon Drakesmith, Chief Financial Officer of Hammerson, said: “This new credit facility is the latest milestone in our journey to reduce Hammerson’s cost of debt by refinancing in an attractive funding environment. I am particularly delighted to welcome five new banks into our relationship group and appreciate the support from major institutions from Asia, US and Europe.”