I-Res raises €200m to pay down credit facility

Landlord said average maturity of debt is 9.7 years

Photograph: Nick Bradshaw/The Irish Times

Photograph: Nick Bradshaw/The Irish Times

 

The State’s largest landlord has raised almost €200 million in debt to help pay down its revolving credit facility.

I-Res Reit said on Wednesday said it closed the issue of €130 million while its subsidiary closed the issue of $75 million (€66 million) on a private placement basis.

The debt has a weighted average fixed interest rate of 1.92 per cent and an average maturity of 9.7 years, the company said in a stock market update.

Some $50 million in dollar denominated notes will fall due in March 2027 while the remaining $25 million will fall due in March 2030. Meanwhile, €90 million in euro denominated debt will fall due by 2030 with the remainder payable by 2032.

“We are very pleased to have completed successfully our first notes private placement which was heavily oversubscribed and reflects the strong support of investors for the company,” said I-Res chief executive Margaret Sweeney.

“The closing of this transaction is part of our proactive financing strategy to reduce the cost and significantly extend the maturity of our debt facilities as well as diversifying the range of debt providers to the company. This also gives the company access to a broader range of funding options in the future to support the company’s growth strategy.”

I-Res said the debt offering attracted strong interest from international institutional investors, including US life insurance and US institutional investors that were not previously part of the company’s investor base.

Goodbody analyst Colm Lauder said the money raised in the well-flagged plan to borrow in the market would be used to pay down the company’s €600 million revolving credit facility.

“I-Res noted at its full-year results in February that there was no widening in the interest rate sought from investors following the General Election outcome and it is welcome to see the deal complete in the face of the macro uncertainty currently hindering the stock price,” he said.

The real estate investment trust currently owns 3.692 residential units with an additional 193 due to be delivered by the end of 2021. It also has planning approval to develop an additional 627 residential units on its existing sites.