Real estate plc locks in refinancing
Several London-listed REITs and other real estate investors ended 2022 with revamped funding lines as they look to shore up balance sheets during a volatile period for funding markets.
Last week, PRS REIT struck a short-term extension to its £150m revolving credit facility with Lloyds and RBS, which was due to mature this February.
The facility will now run until 14 July 2023, maintaining its margin above the three-month Sonia rate. “In light of recent macro environment market volatility, this will provide additional time for market conditions to stabilise and offers the company further flexibility to fully explore its funding options,” PRS REIT said.
Several London-listed REITs and other real estate investors ended 2022 with revamped funding lines as they look to shore up balance sheets during a volatile period for funding markets.
Last week, PRS REIT struck a short-term extension to its £150m revolving credit facility with Lloyds and RBS, which was due to mature this February.
The facility will now run until 14 July 2023, maintaining its margin above the three-month Sonia rate. “In light of recent macro environment market volatility, this will provide additional time for market conditions to stabilise and offers the company further flexibility to fully explore its funding options,” PRS REIT said.
PRS REIT’s move followed news from Impact Healthcare REIT, which doubled the size, extended the term and reduced the margin of its existing revolving credit facility with Clydesdale Bank last week.
The REIT lifted the loan to £50m and pushed its maturity out to December 2029 from March 2024. The revised facility has a margin of 200 basis points over Sonia, down from 225bps.
Conygar Investment Company secured development and investment facilities of a combined £47.5m from Barclays to allow it to complete its 693-bed student accommodation development at the Island Quarter site in Nottingham, priced at 325bps over Sonia for the development facility and 190bps over on the investment facility.
In late December, Schroder European Real Estate Investment Trust completed an early refinancing and extension of its largest debt maturity due in 2023, refinancing a €14m (£12.3m) loan with VR Bank Westerwald secured against offices in Hamburg and Stuttgart.
The bank offered what the REIT described as “the most competitive” of refinancing options from five different institutions: a 4.75-year facility with a margin of 0.85% over the five-year swap rate, in line with the existing package, and a total interest cost of 3.8%. The REIT has extended the facility by €4m.
Fund manager Jeff O’Dwyer said: “The willingness of VR Bank Westerwald and four other lenders to offer very competitive financing terms for a re-gear of the current loan facility, even extending the existing loan amount, is indicative of our strong relationship with existing financing partners and good reputation in the market with lenders.”
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