HB Reavis Group successfully completes largest bond issue to date
International real estate developer HB Reavis has successfully completed the issue of a new series of its PLN 500 million bond programme established for the Polish market, raising €51.9 million / PLN 220 million. This latest issue represents not only the largest tranche in the history of the HB Reavis Group but also the largest bond issue achieved by a commercial real estate developer in Poland this year, demonstrating continued investor confidence in the strategic growth of the company.
HB Reavis placed 4.5-year bonds with a floating coupon rate of 420bps above 6-month WIBOR. After swap into EUR fix-rate, this tranche carries cost of corporate debt at 4.05% p.a.. The securities attracted demand from a significant number of returning investors as well as new investors, with 70 percent taken up by investment funds, 18 percent by banks and the remainder by private banking clients.
This second tranche has consumed over 60% of HB Reavis’ PLN 500 million (approx. €116m) Polish bond programme, at the same time bringing the total raised to PLN 320 million (approx. €75 million) following the first bond issue in Q4, 2016. The proceeds from this latest issue, carried out in cooperation with mBank and Haitong Bank acting as arrangers, will support the company’s international acquisition and development strategy.
Marian Herman, Group CFO at HB Reavis said: The interest in our latest bond issue exceeded our expectations and has served to further strengthen HB Reavis’ reputation amongst subscribers in the Polish bond market. We are very pleased to see a large number of recurring investors as well as welcome new investors who decided to invest in HB Reavis credit for the first time.
We are very happy with the results of this bond issue. Strong investor confidence in HB Reavis’ business resulted in an increased issue size to PLN 220 million, from the initial amount of PLN 150 million and a decrease in margin compared to the previous issue, said Jaroslaw Riopka, from Haitong Bank Debt Capital Markets team.
Just as predicted, the Polish capital market has proven to have high absorption capacity, which supported the successful placement of the offering – achieved without the participation of pension funds – and made this the largest issue in Poland by a commercial real estate developer so far this year, added Przemyslaw Gdanski, Member of the Management Board of mBank.