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Launch and pricing of £125 million USAF bond financing – 13 May 2016

10 November 2016

The Unite Group plc, the UK’s leading developer and manager of student accommodation, today (13 May 2016) 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:

Sion Ffrancon

Public & Corporate Communications Manager

Tel: +44 117 302 7175