TIDMCREI
RNS Number : 8590B
Custodian REIT PLC
07 April 2017
7 April 2017
Custodian REIT plc
("Custodian REIT" or "the Company")
New Term Loan
Custodian REIT (LSE: CREI), the UK property investment company,
is pleased to announce the completion of a new term loan
facility.
On 5 April 2017, the Company and Aviva Investors Real Estate
Finance ("Aviva") entered into an agreement for Aviva to provide
the Company with a new term loan facility of GBP50 million ("the
New Loan"), comprising two tranches of GBP35 million ("Tranche 1")
and GBP15 million ("Tranche 2") respectively.
The Company drew down Tranche 1 on 6 April 2017, which is
repayable on 6 April 2032 with a fixed rate of interest of 3.02%
per annum payable on the balance. Tranche 2 is available for draw
down on or before 5 October 2017 with a fixed rate of interest
payable on the balance, calculated at the same margin as Tranche 1
above the prevailing Treasury 4.25% 2032 gilt rate on the date of
draw down.
Following agreement of the New Loan, the Company has GBP150
million of agreed debt facilities comprising:
-- A GBP35 million revolving credit facility ("RCF") with Lloyds
Bank plc expiring in November 2020, with a maximum loan-to-value
("LTV") of 50% and attracting annual interest of 2.45% above
three-month LIBOR;
-- A GBP20 million term loan with Scottish Widows Limited
repayable in August 2025, with a maximum LTV of 45% and attracting
fixed annual interest of 3.935%;
-- A GBP45 million term loan with Scottish Widows Limited
repayable in June 2028, with a maximum LTV of 45% and attracting
fixed annual interest of 2.987%;
-- A GBP35 million term loan with Aviva repayable in April 2032,
with a maximum LTV of 50% and attracting fixed annual interest of
3.02%; and
-- A GBP15 million term loan facility with Aviva repayable 15
years from the date of drawdown, with a maximum LTV of 50%.
The Company's debt facilities have a weighted average term of
10.1 years, a weighted average cost of 3.1%(1) per annum and 23% of
the available facilities are at a variable rate of interest.
Following drawdown of Tranche 1 the Company has cash and undrawn
facilities of GBP78.0 million available to deploy, which will be
used to acquire GBP14.1 million of properties currently under offer
and in solicitors' hands ("the Pipeline Properties"), with the
balance expected to be significantly invested in other commercial
properties within a period of three to six months.
Net gearing(2) is 13.9%, which is expected to rise to 17.0% on
completion of the purchase of the Pipeline Properties, with the
Company's objective to increase gearing towards a ratio of 25% loan
to value.
Commenting on completion of the New Loan, Richard
Shepherd-Cross, Managing Director of Custodian Capital Limited (the
Company's discretionary investment manager), said:
"With interest rates continuing to be significantly below their
historical average, we have taken the opportunity to reduce the
Company's exposure to interest rate risk, while increasing debt
capacity, lengthening the debt expiry profile and maintaining the
weighted average cost of debt at 3.1% per annum. The flexibility to
repay the RCF and manage the facility limit to minimise
non-utilisation fees further demonstrates the efficiency of the
Company's debt structure.
"In addition to the Pipeline Properties, we are seeing an
increasing number of acquisition opportunities within our target
lot size and are tracking circa GBP40 million of further
opportunities that fit our investment objectives."
Gregor Bamert, Head of Aviva Real Estate Finance said:
"We are delighted to support Custodian REIT's requirement for a
flexible debt structure, which combines the attractive pricing
currently available for long term debt with the ability to manage
their portfolio proactively. We look forward to being a long term
partner of Custodian REIT, starting with this transaction."
(1) Assuming Tranche 2 attracts fixed annual interest of 3.02%
when drawn.
(2) Gross borrowings less unrestricted cash divided by property
portfolio valuation.
-Ends-
For further information, please contact:
Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Tel: +44 (0)116 240
Mattioli MBE 8740
www.custodiancapital.com
Numis Securities Limited
Nathan Brown / Hugh Jonathan Tel: +44 (0)20 7260 1000
www.numiscorp.com
Camarco
Ed Gascoigne-Pees Tel: +44 (0)20 3757 4984
www.camarco.co.uk
Notes to Editors
Custodian REIT plc is a UK real estate investment trust, which
listed on the main market of the London Stock Exchange on 26 March
2014. Its portfolio comprises properties predominantly let to
institutional grade tenants on long leases throughout the UK and is
characterised by properties with individual values of less than
GBP10 million at acquisition.
The Company offers investors the opportunity to access a
diversified portfolio of UK commercial real estate through a
closed-ended fund. By targeting sub GBP10 million lot size,
regional properties, the Company intends to provide investors with
an attractive level of income with the potential for capital
growth.
Custodian Capital Limited is the discretionary investment
manager of the Company.
For more information visit www.custodianreit.com and
www.custodiancapital.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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