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British Land issues £350m convertible bond to fund acquisition drive

PROPERTY DEVELOPER British Land has launched a £350m convertible bond to fund the acquisition of two central London properties and future spending plans.

The company said the senior, unsecured convertible bonds, due in 2020, would be used 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.

The acquisition of One Sheldon Square was a strategic acquisition to increase British Land’s ownership interest at its Paddington Central office-led campus, while the Surrey Quays deal completes a 46-acre site at Canada Water, assembled in four transactions over five years, it said.

More generally, the company said the offering contributes to its existing strong financial position and takes advantage of “favourable market conditions to diversify its medium term sources of finance and keep its cost of debt low”.

The bonds have an expected maturity date of 9 June 2020 and are expected to carry a coupon of between 0.00% and 0.50% per annum payable semi-annually in arrear. The shares underlying the bonds represent approximately 3.08% – 3.28% of the company’s issued share capital immediately prior to the offering.

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