British Land taps US investors in record $480m private placement

BRITISH Land, the second-largest UK real estate investment trust (REIT), has closed a $480m (£300.6m) US private placement bond issue, taking the total funds it has raised since May to $860m, it said yesterday.

It is the largest US private placement by a UK REIT, involving 12 investors and a range of maturities between seven and 15 years.

“For any of the UK REITs diversifying, their source of funding is a positive,” said Mike Bessell, a property analyst at Evolution Securities.

“Traditional large lenders to the sector in the UK such as RBS and Lloyds are reducing their exposure.”

Other property companies to announce bond issues this year include Great Portland Estates and Derwent London.

The oversubscribed placement, originally launched at $200m, takes the company’s weighted average debt maturity and interest rate, including share of joint ventures and fund debt, to 9.7 years and 4.8 per cent respectively, British Land said.

Royal Bank of Scotland and HSBC acted as joint agents and hedge co-ordinators, and Lloyds Banking Group provided hedge underwriting and syndication.