Supermarket Income REIT raises £250m from its first bond issue
By Josh White
Date: Thursday 24 Jul 2025
(Sharecast News) - Supermarket Income REIT announced on Thursday that it has successfully completed its first bond issuance, raising £250m through a six-year senior unsecured bond, as the specialist real estate investment trust looked to diversify its funding sources and enhance financial flexibility.
The FTSE 250 REIT said the sterling-denominated bond, priced at a coupon of 5.125% and a spread of 115 basis points over the benchmark, received strong demand from institutional investors, with the order book peaking above £985m.
It said the bonds were expected to be rated BBB+ by Fitch, in line with the company's issuer rating, and would be listed on the International Securities Market of the London Stock Exchange.
The proceeds would be used for general corporate purposes, including the refinancing of existing debt.
It said the issue marked a shift toward unsecured financing, and extended the company's average debt maturity by nearly two years.
On a pro-forma basis, the company's loan-to-value (LTV) ratio would be 34%, with a weighted average debt maturity of 4.6 years.
"As previously indicated, it has been a long-held ambition of ours to issue a bond and we are pleased that it has received such a strong level of investor interest," said chief financial officer Mike Perkins.
"Our first bond issuance represents a significant milestone for the company, enhancing our financial flexibility and supporting our long-term growth strategy."
He added that the longer-dated financing, secured at an attractive fixed rate, would lower the REIT's medium-term borrowing costs and enhance the earnings potential of its acquisition pipeline, once joint venture proceeds were redeployed.
The company said the bond would also allow it to hedge its overall interest rate exposure to approximately 4.7%, helping to support its focus on delivering a fully covered, growing, and sustainable dividend.
Barclays, Goldman Sachs, and HSBC acted as joint active bookrunners on the transaction.
Wells Fargo and NatWest served as passive bookrunners, with Rothschild advising the company.
At 1201 BST, shares in Supermarket Income REIT were down 1.08% at 78.45p.
Reporting by Josh White for Sharecast.com.
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