19th Feb 2021 09:32
(Alliance News) - Civitas Social Housing PLC said it has secured a new seven-year term, interest only, loan facility of GBP84.6 million from M&G Investment Management Ltd, a new lender to the company.
The facility is priced at 2.8% above a fixed rate set by reference to the Libor swap rate. It is secured by an existing portfolio of specialist supported living assets, the midcap social homes investor noted.
Civitas added: "The facility is designed to support the company's continuing growth plans and Civitas intends to utilise the proceeds of the facility during 2021 to enable the purchase of high-quality properties that form part of the pipeline of new transactions. This in turn is expected to further enhance both rental income and in due course dividend cover."
The drawdown of the facility, Civitas said, will increase its loan-to-value to 34.6%, which the company said maintains its ongoing objective of a preferred gearing level of about 35% of gross portfolio asset value with a ceiling of 40% of gross portfolio asset value.
Chair Michael Wrobel said: "We are delighted to have secured this new loan facility from M&G, a leading institutional lender with extensive experience and understanding of the social housing sector.
"We expect this loan to be utilised over the coming months to bring forward our extensive pipeline of high quality properties and continue to deliver on our dual mission of stable long-term income for our shareholders and excellent long-term accommodation for the residents in our properties."
Shares in Civitas Social Housing were 0.4% higher in London on Friday morning at 108.00 pence each.
By Paul McGowan; [email protected]
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