VGP: Tanking green cash for its growth engine VGP BB
VGP raised EUR 1bn in two equal size green bond tranches, a 5-year bond with a coupon of 1.625% and an 8-year with 2.250%. The pricing spreads (160, 205 bps) indicate an increase as yields rose with a more hawkish FED lately, but demand was still 2.5x oversubscribed. The cash will enable VGP to execute its growth plan while still holding a strong negotiation position in its Allianz-JV to recycle capital. On 24th November, VGP also raised EUR 300m of new shares at 240 Euro per share. Last week, VGP published a FY21 trading statement that came a tad above our expectation on new development starts and land acquisitions in sqm. We maintain our 250 Euro target. VGP share price will be less impacted by FED tightening waves that hit the market as it has a full tank of cash for its growth plan.VGP NV is a Belgium-based real estate development company that constructs and develops industrial real estate and ancillary offices, which are rented out to clients on long term lease contracts. The Company operates in three business segments: the Development activities segment is focused on the identification and acquisition of the land and development of the infrastructure, the design of buildings, the coordination of architectural and engineering aspects, the administration to obtain the necessary permits, the tendering and coordination of the construction works, including site management, and the facility management of the real estate portfolio; the Property Management and Leasing services segment is responsible for managing the operation of the buildings, and the Facilities Management services segment is responsible for managing the operation of the buildings and performs all actions, such as maintenance services, waste management services and maintenance greenery, among others.
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