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Bonds Issued to Finance Kingston Refurbishment

Posted by Richard Ward in ,

Image courtesy of Flickr, Creative Commons

Assured Guaranty (Europe) plc (AGE UK) has announced that it has guaranteed principal and interest payments on £90 million of bonds issued by Kingston Student Living LLP.

The bond issuance will finance the refurbishment and redevelopment of existing student accommodation at Kingston University. The guarantee from AGE UK, means the bonds are expected to be rated AA by S&P Global Ratings.

The 35-year bonds, distributed in two tranches of fixed and indexed-linked debt, reached financial close on 29th July and took advantage of low long-term rates. The bonds were sold as a private placement to UK investors.

The placement will finance the refurbishment and redevelopment of student accommodation across two of the university's existing sites. One in Kingston Hill and one at Seething Wells will provide a total of 1,333 beds, with the revamped halls providing updated bedrooms, kitchens and new social and study spaces.

Engie Regeneration will refurbish and complete the new development, delivering the accommodation in phases of two years.

Commenting on the bonds, Dominic Nathan, Managing Director of AGE UK, said: "We are delighted to have closed another student accommodation financing that demonstrates the ability of our wrapped financing solution to provide an efficient form of financing for projects of this type. Despite difficult financial and general market conditions in 2020 and unprecedented overall public health and economic circumstances, our collaborative approach with the University and sponsors, along with investor demand for Assured Guaranty wrapped debt, has resulted in a successful deal for the University. We believe investors, whether direct lenders or bond purchasers, are attracted by the high rating and associated low capital charges our guarantee adds to long-term financings, along with the efficient asset-liability matching this type of investment can provide."

AGE UK will guarantee timely payment of scheduled principal and interest to holders of the debt instrument throughout the life of the debt.