Business
Convertible Bond Offering & Concurrent Repurchase
Convertible Bond Offering & Concurrent Repurchase.
About this update from Derwent London Plc
[{"type":"text","content":"\n \nRNS Number : 1935B Derwent London PLC 05 June 2019 \n\nNOT FOR DISTRIBUTION IN OR TO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA, OR IN OR TO ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW\n \nDerwent London plc Convertible Bond Offering and Concurrent\nRepurchase of Outstanding Convertible Bonds due 2019 \n \nDerwent London plc (the \"Company\", together with its subsidiaries, the \"Group\") today announces the launch of (i) an offering of £175 million of Convertible Bonds due 2025 (the \"Bonds\") and (ii) the concurrent repurchase (the \"Concurrent Repurchase\") of the outstanding £150 million 1.125% Convertible Bonds due 2019 (ISIN: XS0954745351) issued by Derwent London Capital No. 2 (Jersey) Limited (the \"Outstanding Bonds\"). \nRationale and use of proceeds\nAs outlined at the time of the 2018 results announcement, the Group has been considering its options in relation to the redemption or potential conversion of the Outstanding Bonds. With the Company's share price trading generally above the prevailing conversion price, the Group has decided to avoid potential dilution risk via an offer to repurchase the Outstanding Bonds and a concurrent new issue. The Bonds are expected to achieve an initial conversion price above the December 2018 Group net asset value per share and substantially above the conversion price of the Outstanding Bonds.\nThe Bond offering and Concurrent Repurchase form part of the Group's longstanding financing strategy and will:\n· fully fund the Concurrent Repurchase through issue of the Bonds with any remaining proceeds used to help fund the Group's development pipeline, provide resources for future acquisitions and otherwise be used for general corporate purposes;\n· maintain existing low gearing levels (the last published loan-to-value ratio for the Group was 17.5% in March 2019);\n· extend the weighted average maturity of borrowings; and\n· raise finance with a cash coupon below the Group's average cost of debt.\nOffering of Bonds\nThe Bonds are expected to be issued by Derwent London Capital No. 3 (Jersey) Limited, a wholly-owned subsidiary of the Company incorporated in Jersey (the \"Issuer\"), and will be guaranteed by the Company.\nThe Group r...