Kennedy-Wilson Q3 refi leaves no unsecured debt maturing until 2025

By Devika Patel

Knoxville, Tenn., Nov. 5 – Kennedy-Wilson Holdings, Inc. has a completely undrawn $500 million revolver and no unsecured debt maturing until 2025 in large part due to a refinancing of debt in which the company sold $600 million of 4¾% notes due 2030 and repaid £219.8 million of 3.95% bonds due 2022, along with the balance on its revolver.

Kennedy Wilson’s share of debt had a weighted average interest rate of 3.6% per annum and a weighted-average maturity of 6.5 years as of the end of the last quarter, with approximately 89% of the debt either fixed or hedged with interest rate caps.

“We have significantly improved our maturity schedule, with no unsecured debt maturities until 2025 and nothing outstanding on our $500 million revolving credit facility,” chief financial officer Justin Enbody said on the company’s third quarter ended Sept. 30 earnings conference call on Thursday.

“Our debt has a pro forma average interest rate of 3.6% and a weighted average maturity of 6.5 years, which has improved by 2.5 years since the beginning of the year,” Enbody said.

In August, the company issued $600 million of debt, with the intent of repaying its revolver and some of subsidiary Kennedy Wilson Europe Real Estate Ltd. ’s sterling-denominated notes.

“In August, we issued $600 million of unsecured bonds maturing in 2030,” Enbody said.

“The proceeds were used to fully pay off our line of credit, as well as the remaining $296 million of our [Kennedy Wilson Europe] bonds due in 2022, which was completed in October,” Enbody said.

Adjusted EBITDA is $741 million thus far in 2021, compared to $261 million for the first nine months of 2020.

Adjusted EBITDA grew to $203 million for the quarter, compared to $76 million for the third quarter of 2020.

“I’m very pleased with our strong third quarter results, which saw adjusted EBITDA increase over 165% compared to Q3 of 2020 and the record results we have posted for the first nine months of the year,” chairman and chief executive officer William J. McMorrow said on the call.

As of Sept. 30, Kennedy Wilson had $500 million of undrawn capacity on its revolving line of credit.

Cash and cash equivalents were $840.8 million as of Sept. 30, 2021, compared to $965.1 million as of Dec. 31, 2020.

Kennedy Wilson unsecured debt was $1,775,700,000 as of Sept. 30, 2021, compared to $1,332,200,000 as of Dec. 31, 2020.

Kennedy Wilson Europe unsecured bonds outstanding principal was $929.1 million as of Sept. 30, 2021, compared to $1,172,500,000 as of Dec. 31, 2020.

On Aug. 9, the company priced an upsized $600 million issue of senior notes (B1/BB) due Feb. 1, 2030 at par to yield 4¾% in a drive-by.

The issue size increased from $500 million.

The yield printed in the middle of yield talk in the 4¾% area and tight to initial guidance in the high 4% area.

Left bookrunner BofA Securities Inc. billed and delivered. Joint bookrunners were J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., U.S. Bancorp Investments Inc., Fifth Third Securities Inc. and Goldman Sachs & Co. LLC.

Proceeds, along with cash on hand, were earmarked to redeem all £219.8 million of Kennedy Wilson Europe’s 3.95% senior bonds due 2022 (ISIN: XS1117292554) and to pay down revolver debt.

On Oct. 7, Kennedy-Wilson reported that Kennedy-Wilson Europe would redeem the 2022 bonds at a make-whole redemption price of £1,024.96 plus £11.15 in accrued interest per £1,000 bond.

The bonds were redeemed in full on Oct. 11, a delay from the original redemption date of Sept. 10.

Kennedy-Wilson Holdings is a subsidiary of Kennedy-Wilson Inc., a Beverly Hills, Calif.-based real estate company.

© 2015 Prospect News.
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