Assura announces £300m bond
Assura, the Warrington-headquartered healthcare developer and investor, has launched the bond as it looks to deliver a pipeline of projects worth £225m.
The business’s first sterling-denominated senior unsecured bond will have a tenor of 10 years and has been announced following a series of meetings with UK fixed income investors which Assura said had demonstrated strong institutional demand.
The bond will bear interest at a rate of 3% per year and will be issued by Assura Financing plc and guaranteed by Assura with a number of the group’s subsidiaries.
Fitch Ratings recently assigned Assura an investment grade rating of A-, which is classed as ‘stable outlook,’ and is expected to assign the Bond an investment grade rating of A-, Assura said.
Bonds allow major investors to effectively lend money to a business, rather than investing in it by buying shares. It is rare for a regional business to be in a position to pursue such a blue-chip form of debt finance, and puts the business in some exalted company – this was the third sterling issuance this week, following breakdown giant AA and German business Aroundtown.
The bond issuance is part of Assura’s overall financing initiatives to further diversify its sources of funding and extend its debt maturity profile. The proceeds will be used for general corporate and working capital purposes, it said. Assura now has 524 medical centres in its portfolio.
Barclays and HSBC acted as joint active bookrunners, while Banco Santander acted as passive bookrunner. Assura was advised on the bond and credit rating by Rothschild & Co.
Jayne Cottam, chief financial officer, said: “We are delighted to have achieved an A- rating from Fitch, which shows the strength of our business model. This, and the level of bond investor support we received, has enabled us to price, successfully, our debut unsecured public bond.
“The bond extends our maturity profile and provides access to a new capital market which provides further funding to allow us to execute on our £225m pipeline.”
Following the issuance of the bond, Assura’s weighted average debt maturity will increase from 6 years to 8.3 years and the pro forma weighted average cost of debt will be 3.27%.
In May, Assura reported positive figures, with its investment portfolio now valued at £1.7bn and rent roll increasing to £91m.
The group believes that in a field typified by under-investment and fragmented ownership of the country’s 9,000 surgery buildings, its portfolio makes it well placed.