Jun 20, 2005
Slough Estates plc has today completed its two Exchange Offers which were launched on 10th May 2005, resulting in a reduction in the Group's interest costs by over £10m per annum.
The first Exchange Offer was to holders of Slough Estates' three "Shorter Dated Existing Notes" (£50 million 10% Eurobond due 2007, £31.85 million 12.375% Unsecured Loan Stock due 2009 and £100 million 11.625% Eurobond due 2012) to exchange all of their Shorter Dated Notes into new unsecured Sterling denominated fixed rate Notes due 2018 (the "Shorter Dated New Notes"). The second Offer was to holders of its "Longer Dated Existing Notes" (£100m 10% Eurobond due 2017 and £40 million 11.25% First Mortgage Debenture Stock due 2019) into new unsecured Sterling denominated fixed rate Notes due 2035 (the "Longer Dated New Notes").
Over 75% of the holders of the two classes of debt issue voted in favour of the transaction and therefore the Shorter and Longer Dated Existing Notes have been exchanged and effectively redeemed as at 20th June 2005. The market value of the debt exchanged was £437 million (excluding accrued but unpaid interest), in addition to which Slough Estates paid an incentive fee of £4.9m. These amounts have been refinanced as follows:
Shorter Dated New Notes: £200 million 5.50% 2018 Priced at 99.416%
Longer Dated New Notes: £100 million 5.75% 2035 Priced at 99.229%
Bank drawings: £146 million circa 5.13% from bank lines (in respect of bonds cashed in and fees)
The transactions will result in an exceptional charge to the Group's accounts in 2005 of approximately £125 million under IFRS (£121m under UK GAAP). Fees of approximately £2 million associated with the exchange and the new issue discount are expected to be expensed over the life of the new bonds.
Trevor Mant, the Slough Estates' Group Treasurer said "I am very pleased to see the successful conclusion of this transaction through the support of our investor base. Slough Estates now has the lowest coupon and longest dated unsecured public debt issues in the UK property sector and the Group's future earnings will benefit directly as a result."
Slough Estates is a leading provider of flexible business space in business parks in Western Europe and North America, with over 1500 customers occupying 2,996,967 square metres of business space, with a total value of £3.9 billion. Slough Estates' properties are in suburban locations in close proximity to the main business centres, where there is long term demand for business accommodation to serve these key economic regions. The company's main activities are currently based around London, Brussels, Paris, Düsseldorf, San Francisco and San Diego and the company continues to develop new business parks with the long term objective of building shareholder value and enhancing its reputation for quality buildings offering excellent value to customers.
www.sloughestates.com
For further information contact:
Slough Estates
Dick Kingston, Group Finance Director, Tel: 01753 537171
Trevor Mant, Group Treasurer, Tel: 01753 213389
Shared Value Limited
Andrew Best / Emily Bruning
Tel: 020 7321 5022 / 5027