10th Apr 2014 11:29
LONDON (Alliance News) - Primary Health Properties PLC Thursday unveiled a refinancing deal, which it said represents a further step to returning the company to its priority of full dividend cover.
Primary Health Properties will refinance a proportion of the debt assumed under its December 2013 PPP acquisition into a new GBP50 million, five year revolving facility that has been agreed with HSBC. The facility will accrue interest at a rate of between 200 and 225 basis points over LIBOR and will include an element that will be used to fund forward development commitments.
The remainder of the PPP debt is to be re-structured with Aviva to provide amended interest only facilities that will be used to refinance the remaining GBP113 million of assumed debt. This will reduce the applicable rate of interest further below the reduction secured from January 2014 rate. These changes are currently being documented, Primary Health said.
Primary Health completed the first stage of refinancing the debt assumed as part of the PPP acquisition in the period referred to by the release of its Thursday interim management statement, covering January 1 to April 10. This saw the crystallisation of an early refinance fee of GBP13.7 million that had been provided by the vendor within the acquisition pricing.
Meanwhile, the company said that from April 30, the administrative services will be provided by Nexus along with property management services, but at a fixed fee that is greatly reduced from that previously paid with reference to asset values. Primary Health said this will further enhance earnings in 2014 and beyond.
"We are able to continue to acquire further assets that yield a satisfactory surplus over PHP?s marginal cost of debt and have a number of projects either on site or being worked through the approval process that will create additional value and income from the existing portfolio," Managing Director Harry Hyman said in a statement.
"Whilst the rental market remains tough, increases at review are being achieved and will also contribute to increased earnings to assist in achieving dividend cover," Hyman added.
Primary Health shares were Thursday quoted at 347.00 pence, up 0.1%.
By Samuel Agini; [email protected]; @samuelagini
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