Launch and pricing of USAF bond financing

RNS Number : 1365Y

Unite Group PLC

13 May 2016

 

THE UNITE GROUP PLC

("Unite Students", "Unite", the "Group", or the "Company")

Launch and pricing of £125 million USAF bond financing

The Unite Group plc, the UK's leading developer and manager of student accommodation, today announces the launch and pricing of £125 million of bonds issued by the Unite UK Student Accommodation Fund ("USAF") under its existing debt funding platform established in June 2013.

USAF is the largest specialist student accommodation fund in the UK, currently holding a portfolio of 78 properties valued at over £2.1 billion which are located in 24 university towns and cities across the UK providing over 26,800 bed spaces. Unite is the largest investor in USAF with a holding of 23%.

The £125 million is a further issuance under the existing 3.921% bond due June 2025. The new issue is being raised at a premium generating total proceeds to USAF of £137 million, reflecting an implied yield of 2.744% (representing a spread of 1.45 % over the reference gilt yield). The proceeds will be used to repay secured debt that is due to mature in the next year and to fund further growth in USAF. The bonds are expected to be rated A (sf) by S&P Global Ratings and Asf by Fitch Ratings, in line with USAF's existing bonds issued in 2013, at a loan to value of 47%.

The funds raised extend USAF's financing platform, increasing USAF's weighted average debt maturity from seven years at the start of the year to eight years, whilst also resulting in an overall reduction in its total cost of interest from 3.5% at the start of the year to 3.4%.

Unite's share of the new debt represents approximately 4% of the Group's total net debt, on a see-through basis, as at 31 December 2015 and will continue to support the improvement on the Group's key debt statistics on a see-through basis.

Joe Lister, Chief Financial Officer of the Unite Group plc, commented:

"The launch and pricing of the new bond builds on USAF's robust financing platform at attractive pricing levels. Maintaining a strong investment grade rating provides continued benefits in giving access to longer term finance, at competitive rates from a range of capital sources."

For further information, please contact:

The Unite Group plc                                                                            Tel: [phone] Joe Lister, Chief Financial Officer

Bell Pottinger                                                                                        Tel: [phone] Victoria Geoghegan Nick Lambert Elizabeth Snow

Notes to editors:

About Unite Students and USAF

Unite Students revolutionised student housing in 1991, opening the first private and large-scale accommodation, created specifically for students. From pioneering to leading a thriving sector in the UK, Unite is now a FTSE250 company. We offer safe, high quality and bills-inclusive homes for more than 46,000 students in 138 halls, across 28 university cities, working with 60 Universities. As a first home-away-from-home, for most of our students, our buildings are more than bricks and mortar. They offer a solid foundation for their success. Our 1,250 employees are committed to listening to our students and growing our business to anticipate and nurture their needs. Our charity, The Unite Foundation, helps some of our brightest students beat a difficult start in life. So far, we have awarded free student accommodation and generous scholarships to 116 young people.

Unite invests in and operates some specialist funds and joint ventures with institutional investment partners, the largest of which is the £2.1 billion Unite UK Student Accommodation Fund (USAF).

 

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