TIDMDLN
RNS Number : 4746J
Derwent London PLC
17 July 2013
17 July 2013
NOT FOR DISTRIBUTION IN OR TO THE U.S., CANADA, AUSTRALIA,
JAPAN, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH SUCH
DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
Derwent London plc Convertible Bond Offering
Derwent London plc (the "Group", the "Company" or "Derwent
London") today announces the launch of an offering of GBP150m of
Convertible Bonds due 2019 (the "Bonds").
The Bond offering forms part of a wider financial strategy to
lower debt costs, extend maturities and provide an appropriate mix
of secured and unsecured debt for the Group taking advantage of
current favourable market conditions. Derwent London's strategic
aim is to move towards a target for unencumbered assets
representing at least 50% of the total property portfolio over the
next 12 months. The Company intends to use the net proceeds of the
offering to refinance property acquisitions totalling approximately
GBP93m made in the last 12 months, to help fund its significant
development pipeline and to increase resources for future
acquisition opportunities.
Derwent London has a committed capital expenditure programme of
around GBP400m and is currently on site at projects totalling in
excess of 400,000 sq ft (37,200m(2) ). Over the next 12 months the
Group will start construction of a further 345,500 sq ft
(32,050m(2) ). Following the expected completion of the sale of 1-5
Grosvenor Place SW1, Derwent London will still have 2.5 million sq
ft (232,000m(2) ) of space that could potentially be delivered by
2020.
The Group intends to announce its interim results for the six
month period ended 30 June 2013 on 15 August 2013. Our performance
is anticipated to be in line with the Group's expectations.
The Bonds are expected to be issued by Derwent London Capital
No. 2 (Jersey) Limited, a wholly-owned subsidiary of the Company
incorporated in Jersey, and will be guaranteed by the Company. The
Bonds will be senior and unsecured obligations of the Company and
will be subject to a negative pledge.
The Bonds will be issued at par and are expected to carry a
coupon of between 1.25% and 1.75% per annum payable semi-annually
in arrear and will, subject to certain conditions, be convertible
into fully paid Ordinary Shares of the Company (the "Shares"). The
initial conversion price is expected to be set at a premium of
between 30% and 35% above the volume weighted average price of the
Shares from launch to pricing on 17 July 2013.
Settlement is expected to take place on or about 24 July 2013
(the "Settlement Date"). If not previously converted or redeemed,
the Bonds will be redeemed at par on 24 July 2019. The Company will
have the option to call all outstanding Bonds on or after the date
falling 15 days after the Interest Payment Date falling in July
2016 at par plus accrued interest if the value of the Ordinary
Shares underlying a Bond equals or exceeds 130% of the conversion
price for at least 20 out of 30 consecutive dealing days or, at any
time, if 15% or less of the principal amount of the Bonds remains
outstanding.
It is intended that an application will be made for the Bonds to
be listed on the Official List and admitted to trading on the
Professional Securities Market of the London Stock Exchange prior
to the first interest payment date (expected to be 24 January
2014).
Barclays Bank PLC and The Royal Bank of Scotland plc are acting
as Joint Global Coordinators and Joint Bookrunners and HSBC Bank
plc, J.P. Morgan Securities plc and UBS Limited are acting as Joint
Bookrunners for the offering. Rothschild is acting as financial
adviser to Derwent London for the offering.
For further information, please contact:
Derwent London John Burns, Chief Executive
Officer
Tel: +44 (0)20 7659 3000 Damian Wisniewski, Finance
Director
About Derwent London plc
Derwent London plc owns a portfolio of commercial real estate
predominantly in central London valued at GBP2.9bn as at 31
December 2012, making us the largest London-focused real estate
investment trust (REIT).
Our experienced team has a proven record of value creation
through development, refurbishment and asset management activities.
We take a fresh approach to each building, adopting a design-led
and tenant-led philosophy. We focus on buildings with reversionary
mid-market rents, particularly those in improving locations around
the West End and the City borders.
The business is grounded on a strong balance sheet with modest
leverage, a robust income stream and flexible financing. Landmark
schemes in our portfolio of 5.4 million sq ft (505,800m(2) ) as at
31 December 2012 include Angel Building EC1, Buckley Building EC1,
Qube W1, Horseferry House SW1 and Tea Building E1.
In 2013 to date Derwent London has won the 'West End Deal of the
Year' for our letting to Burberry at 1 Page Street SW1 and 'City
Development of the Year' for our 4 & 10 Pentonville Road N1
scheme at the OAS Development Awards as well as 'Developer of the
Year' at the New Energy & Cleantech Awards.
Derwent London came seventh overall in the 2012 Management Today
awards for 'Britain's Most Admired Companies', topping the real
estate sector for the third year in a row. Earlier in 2012 the
Group won the Estates Gazette 'Property Company of the Year -
Offices' award. Last year the Tea Building also won a RIBA regional
award and an AJ Retrofit award for the 'Green Tea' refurbishment to
improve the environmental performance of the building.
For further information see www.derwentlondon.com or follow us
on Twitter at @derwentlondon.
This announcement does not constitute or form part of an offer
to sell or the solicitation of an offer to subscribe for or
otherwise acquire any securities in the United States or in any
other jurisdiction. This announcement is not for distribution,
directly or indirectly in or into the United States (as defined in
Regulation S under the US Securities Act of 1933, as amended (the
"Securities Act")). The securities referred to herein have not been
and will not be registered under the Securities Act and may not be
offered or sold within the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
DISCLAIMER
This communication is directed only at persons who (i) are
outside the United Kingdom or (ii) have professional experience in
matters relating to investments falling within Article 19(5) of The
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (the "Order") or (iii) are persons falling within Article 49
2(a) to (d) of the Order (all such persons together being referred
to as "relevant persons"). This communication must not be read,
acted on or relied on by persons who are not relevant persons. Any
investment or investment activity to which this communication
relates is available only to relevant persons and will be engaged
in only with relevant persons.
The Joint Bookrunners are acting on behalf of the issuer and the
Company and no one else in connection with the Bonds and will not
be responsible to any other person for providing the protections
afforded to clients of the Joint Bookrunners or for providing
advice in relation to the Bonds.
N M Rothschild & Sons Limited ("Rothschild"), which is
authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation
Authority in the United Kingdom, is acting for the Company and no
one else in relation to the Bond offering and will not be
responsible to anyone other than the Company for providing the
protections afforded to clients of Rothschild nor for providing
advice in relation to the Bond offering.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by the Joint Bookrunners or by Rothschild or
by any of their respective directors, officers, employees or agents
as to or in relation to the accuracy or completeness of this
announcement or of any written or oral information made available
to any interested party or its advisers and any liability therefor
is hereby expressly disclaimed.
Stabilisation/FCA
THE ROYAL BANK OF SCOTLAND PLC IS ACTING AS STABILISING MANAGER.
IN CONNECTION WITH THE ISSUE OF THE BONDS THE STABILISING MANAGER
OR ANY PERSON ACTING ON BEHALF OF THE STABILISING MANAGER MAY
OVER-ALLOT BONDS OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING
THE MARKET PRICE OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH
MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE
STABILISING MANAGER (OR ANY PERSONS ACTING ON BEHALF OF THE
STABILISING MANAGER) WILL UNDERTAKE STABILISATION ACTION. ANY
STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH PUBLIC
DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE BONDS IS MADE
AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER
THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE BONDS AND
60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE BONDS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ARIRFMRTMBTBBPJ
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