138 Student Living Limited (138SL) has launched a new secured bond as it seeks to refinance up to $1.2-billion worth of debt.

The student housing company is aiming to refinance $1.11 billion of its long-term debt and pay for transaction costs through the issuance of a secured bond with two tranches. 138SL currently has approximately $3.30 billion in total debt, with $1.08 billion from its series 2 secured notes maturing by June 2027.

“This issuance of bond is part of a wider liability management exercise being undertaken by the 138SL Group. The overall purpose of that exercise is to better align the 138SL Group’s debt servicing requirements with their expected cash flows,” 138SL stated.

The company is aiming to issue tranche I with a face value of $400 million, having an interest rate of 9.00 per cent and a tenure of three years. 138SL would repay $33.33 million per quarter towards the principal balance until the April 2029 maturity date.

With respect to tranche II, 138SL is aiming to raise $800 million with an interest rate of 10.50 per cent and a tenure of 7.5 years. The company would repay $40 million in principal amounts in July 2029 and July 2030 before repaying $240 million in each subsequent year until the July 2033 maturity date. The bond is secured by all present and future assets of 138SL and its subsidiary along with other assignments of rights and insurance.

According to the company’s 2025 annual report, the refinancing move is aimed at improving cash flow flexibility and “aligning our capital structure with the now more stable earnings profile of the business”.

The offer opened on March 23 and is scheduled to close by April 27. Accredited investors are required to purchase a minimum of $1 million to participate in the bond, while minimum purchase investors must subscribe with a minimum of $10 million. Additional investments by other group will be done in increments of $100,000.

138SL earnings improving

The student housing company’s main operations are centred around it renting 1,464 accommodation units at The University of the West Indies (UWI), Mona. This is centred around four halls of residences, namely Irvine Hall, George Alleyne Hall, Leslie Robinson Hall, and Gerald Lalor Flats.

Although 138SL restated its 2022 to 2024 audited financials in relation to Irvin Hall claims and other items, the business still demonstrated an upward trajectory in the September 2025 financial year (FY).

138SL’s consolidated income improved 13 per cent to $1.34 billion, with 94 per cent of rental income relating to long-term rentals. Although the company’s operating expenses increased three per cent to $831.39 million, operating profit improved 28 per cent to $561.68 million. The 11 per cent reduction in finance costs and resulting tax credit saw net profit moving from $86.68 million to $266.31 million, a 209 per cent rise in the 2025 FY.

138SL’s consolidated operating cash flow grew 16 per cent to $618.92 million, but this was nearly equivalent to the cash flow from financing activities of $616.70 million which comprised interest and loan repayments.

138SL’s total assets declined eight per cent to $8.96 billion due to a near $1-billion reduction in its concession rights with UWI, which was revalued to $8.05 billion. Current assets improved 36 per cent to $727.64 million, but the bulk of this was connected to the UWI Mona receivables. Total liabilities dipped to $4.27 billion, with equity at $4.69 billion.

For the first quarter ending December 2025, 138SL’s income grew four per cent to $389.37 million, but a slight rise in administrative expenses saw operating profit dip six per cent to $170.97 million. Profit before tax was $102.17 million, with net profit increasing 12 per cent to $92.68 million.

138SL’s total assets stood at $9.06 billion with $39.33 million in cash. Total liabilities and equity were $4.19 billion and $4.88 billion, respectively.

138 Student Living Chairman Ian Parsard .