LONDON - Annington Funding PLC, a property investment company specializing in UK residential real estate, has announced a comprehensive debt restructuring plan following the sale of its Married Quarters Estate (MQE) units to the Ministry of Defence. The move aims to rationalize the company's debt capital structure to align with Annington's long-term business strategy of investing in UK housing assets.
The company currently has seven series of unsecured fixed-rate notes totaling £3.354 billion under its £5 billion Euro Medium Term Note Programme, with a weighted average maturity of 12.9 years and a cost of debt at 3.47%. Additionally, Annington holds a £400 million floating rate term loan and a £100 million undrawn revolving credit facility.
Proceeds from the MQE transaction will be utilized to reshape Annington's balance sheet by repaying a portion of its outstanding debt. This will include tender offers for certain series of notes and the redemption of other series of notes, as well as the repayment of the term loan. Surplus capital will support new property investments and a dividend payment to shareholders.
The company has launched tender offers for the 2029, 2032, 2034, 2047, and 2051 notes, inviting note holders to tender their notes for purchase by the issuer for cash. Noteholders who tender before the early deadline on December 23, 2024, will receive an additional premium. The tender offers are contingent upon the closing of the MQE sale.
Annington has also announced the redemption of the 2025 and 2033 notes and will repay the term loan and cancel the revolving credit facility, all expected to settle on January 14, 2025. The company does not intend to voluntarily redeem any notes not tendered in the offers.
Following the transaction and debt restructuring, Annington plans to maintain a balance sheet where the principal of its remaining notes is around 55% of the value of its cash, property, and other assets. The company will continue to make all payments of principal and interest on the outstanding notes as due.
Annington's long-term strategy remains focused on the acquisition of stable, high-quality UK residential real estate assets. The company has a history of refurbishing properties and managing a significant non-MQE asset base.
The company has scheduled an investor update conference call for December 17, 2024, led by the CEO and CFO, although no questions will be taken during the call. A transcript will be available on Annington's website following the call.
This article is based on a press release statement from Annington Funding PLC.
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