Intermoney | Inmobiliaria Colonial (COL) (Buy, Target Price €8.5/share) has announced the placement of a bond maturing in September 2031 for a nominal amount of €800 million, with an annual coupon of 3.125%.
The subscription and disbursement of the Bonds is expected to take place on 23 September 2025. The Bonds are expected to be admitted to trading on the regulated market of Euronext Dublin. The REIT has stated that the bond will have a BBB+ rating from S&P. Taking into account the pre-hedging, the effective interest rate on the issue will be around 2.7%. Colonial plans to use the total net proceeds from the bonds to finance and/or refinance eligible green projects (Eligible Green Assets) in accordance with its Green Financing Framework.
Assessment: This is another bond issue by Colonial, which uses this method of financing almost exclusively. Traditionally, the parent company and its French subsidiary SFL have issued debt separately, although it is expected that after the merger of the two, the former will be responsible for these tasks. The amount of the bond placed is significant, as COL has to meet two maturities (November 2025 and April 2026) for a total of €1.1 billion. These two issues date from 2017-18, with maturities of 7-8 years, and paid a coupon of less than 2%, which shows the gradual rise in interest rates that has occurred since then.
