PHP refinances with £300m of sustainability-linked loans
Primary Health Properties has refinanced with a £200m sustainability-linked facility from Aviva Investors.
The healthcare landlord has also renewed its £100m facility with NatWest.
The 15-year Aviva facility will be at a fixed rate of 2.52%, but PHP will benefit from a margin reduction if it hits sustainability KPIs based on its existing targets. These focus on improving the portfolio’s EPC ratings and new developments being built to higher BREEAM standards.
Primary Health Properties has refinanced with a £200m sustainability-linked facility from Aviva Investors.
The healthcare landlord has also renewed its £100m facility with NatWest.
The 15-year Aviva facility will be at a fixed rate of 2.52%, but PHP will benefit from a margin reduction if it hits sustainability KPIs based on its existing targets. These focus on improving the portfolio’s EPC ratings and new developments being built to higher BREEAM standards.
The proceeds of the loan have been used to repay a number of legacy facilities with Aviva Investors totalling £177m, at a blended fixed rate of 5% and weighted average term of just under six years. A termination fee of £24m was paid as part of the refinancing.
Meanwhile, PHP’s existing £100m revolving credit facility with NatWest has been renewed for a further three-year term, with options to extend by a further year. Sustainability KPIs have also been incorporated into this facility.
The refinancing reduces PHP’s cost of debt from 3.4% to 2.9%, resulting in savings of approximately £5m per year.
Richard Howell, chief financial officer, said: “We are proud to have secured our first sustainability-linked loan facilities, which will reward the group via a margin reduction as we implement our responsible business plan and ESG initiatives published in February this year.”
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