6th Jun 2016 15:13
LONDON (Alliance News) - Custodian REIT PLC on Monday said it has agreed a new GBP45.0 million term loan facility with Scottish Widows Ltd, repayable on June 6, 2028.
The UK property investment company said it agreed the loan on Monday, with Lloyds Bank PLC acting as an agent, and under the terms of the agreement, will pay fixed interest of 2.987% per year on the balance. Scottish Widows, which celebrated its 200th anniversary in 2015, forms part of the insurance arm of Lloyds Banking Group PLC.
Custodian said it has repaid a GBP20.0 million five year variable rent term loan plus an advance of GBP3.7 million drawn on its revolving credit facility, using funds from the new facility with Scottish Widows. No early exit costs were incurred.
As such, Custodian said it currently operates a GBP35.0 million revolving credit facility with Lloyds Bank PLC which will expire in November 2020, a GBP20.0 million term loan facility with Scottish Widows which is repayable in August 2025, and, from Monday, a GBP45.0 million term loan facility with Scottish Widows repayable in June 2028.
Custodian said its debt facilities have a weighted average term of 8.6 years, a weighted average cost of 3.2% per year and 65% of the available facilities are at a fixed rate of interest.
Custodian has cash and undrawn facilities of GBP60.0 million available to it, which it will use to buy GBP13.7 million of properties currently under offer and in solicitors' hands, with the balance expected to be "significantly invested" in other commercial properties within a period of three to six months.
"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 3.2% per annum," said Richard Shepherd-Cross, managing director of Custodian Capital Ltd, which is Custodian REIT's investment manager.
The flexibility to repay the revolving credit facility and manage the facility limit to minimise non-utilisation fees further demonstrates the efficiency of the company's debt structure," Cross added.
Shares in Custodian were down 0.3% at 105.99 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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