Convertible Bond Optional Redemption Notice

About this update from Derwent London Plc

RNS Number : 9653Z Derwent London PLC 17 December 2014           17 December 2014 Derwent London to redeem £175m 2.75% Convertible Bonds 2016 Derwent London plc ("Derwent London") announces that its wholly-owned subsidiary, Derwent London Capital (Jersey) Limited ("DLCJ"), has today sent out notices to redeem all outstanding Convertible Bonds 2016 ("the Bonds") on 30 January 2015 at their principal amount together with any accrued interest.  As an alternative to the redemption of its Bonds, each Bondholder may exercise its Conversion Right by delivering a Conversion Notice.  The Bonds were issued on 2 June 2011 paying a coupon of 2.75% per annum and with a redemption date of 15 July 2016.  This was the first issue of convertible bonds by a UK Real Estate Investment Trust ("REIT") and the conversion price of £22.22 represented a premium of 30% over the Reference Share Price of £17.09.  The EPRA net asset value per share of the Derwent London plc group ("the Group") as at 30 June 2011 was £16.21.   DLCJ is entitled to exercise this early redemption option because the Bonds' Parity Value has equalled or exceeded £130,000 on 20 of the last 30 dealing days up to and including 16 December 2014.  The Bonds' Parity Value is related to the share price of Derwent London which has also exceeded the conversion price for the shares by 30 per cent or more over 20 of the last 30 dealing days.  Derwent London's share price at the close of business on 16 December 2014 was £28.90. If these conversion rights are exercised in full, it would lead to the issue of 7,875,787 ordinary shares.  We estimate that the impact on EPRA earnings per share will be approximately neutral as the increased profits from reduced interest payments will be offset by the larger number of shares in issue.  The Group's cash flow will be enhanced and gearing reduced.  The EPRA adjusted NAV per share is a fully diluted measure and therefore already takes account of the additional shares assuming full conversion. Damian Wisniewski, Finance Director, commented: "Given the strong recent share price, we have decided to exercise our option for early redemption of the Convertible Bonds 2016. With further improved cash flow and interest cover, this will leave us even better placed to deliver our substantial development programme ...

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