Bloomberg News

Grainger Rises After Refinancing Deal Extends Debt Maturities

October 05, 2011

Oct. 5 (Bloomberg) -- Grainger Plc, the U.K.’s largest publicly traded residential landlord, rose the most in six months in London trading after the company reached loan agreements that extend the maturity of its debt.

The stock advanced as much as 8.7 percent to 84 pence, the biggest increase since March 24 and the second-largest gain on the FTSE 250 index. Grainger agreed on new loans worth a total of 890 million pounds ($1.37 billion) to refinance debt that was coming due next year.

A group of five banks agreed to provide 840 million pounds of loans that will mature in four installments starting in December 2014, the Newcastle, England-based company said today in a statement. In addition, Partnership Assurance loaned Grainger 50 million pounds for its retirement-related property investments, Grainger said.

The new package increases the company’s average loan maturity to 5.9 years from 3.5 years. Though the refinancing may add 12 million pounds to annual interest costs, it may ease concerns about how the company would deal with 927 million pounds of debt maturing through 2012, JPMorgan Chase & Co. analyst Osmaan Malik said in a note.

“This news should alleviate the pressure” on Grainger’s share price, which has dropped 42 percent since July, Malik said. “We take this as a bullish signal for the wider sector.”

Grainger was up 6.1 percent at 82 pence as of 8:44 a.m. in London, lifting the company’s market value to 341 million pounds.

--Editors: Ross Larsen, Jeff St.Onge

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net


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