11th Jan 2007 10:29
ISIS Property Trust 2 Limited11 January 2007 ISIS Property Trust 2 Limited Re-financing of bank borrowings and reduction in cost of debt 11 January 2007 The Board of ISIS Property Trust 2 Limited (the "Company") is pleased toannounce that it has re-financed the Company's existing bank borrowings. On 10 January 2007 the Company repaid in full its existing debt facility of£70.7 million with The Royal Bank of Scotland plc and entered into a new £75million facility with Lloyds TSB Scotland plc. The term of this facility isuntil January 2017. The margin under the new debt facility is 50 basis pointsover LIBOR for the first three years and 45 basis points over LIBOR for theremaining period. The other terms of the facility are substantially identical tothe terms of the previous facility with The Royal Bank of Scotland plc. TheCompany has initially drawn down £60 million under the new facility. The Company has entered into a new interest rate swap transaction with LloydsTSB Scotland plc under which the interest on the full amount initially drawndown under the new facility has been fixed at an aggregate interest rate(including margin) of 5.655% per annum for the first three years and 5.605% perannum thereafter. The Company has terminated the existing interest rate swap with The Royal Bankof Scotland plc, under which the interest on the previous debt facility had beenfixed at 6.265% per annum (including the margin of 65 basis points). The cost ofterminating the swap transaction was £1,605,000. Under IFRS, the accountingstandards employed by the Company, the Company already provides for the cost ofterminating the swap and therefore the termination of the swap will have noimpact on the Company's net asset value under IFRS. The Company has used the amount drawn down under the new facility towardsrepayment of the previous debt facility. The arrangement fee and costs of thenew facility (together estimated at £430,000, including irrecoverable VAT), thebreakage costs on the previous interest rate swap and the balance of theprevious debt facility will be met from the Company's existing cash balances. Following the drawdown of the new debt facility, the borrowings of the Companyrepresent approximately 25.0 per cent. of the Company's gross assets. It remainsthe Directors' present intention that the Company's borrowings will not inaggregate represent more than 45 per cent. of the Company's gross assets. The Board believes that the re-financing offers the following benefits to theCompany. - The interest cost of the new debt facility is significantly lower than the interest cost of the existing bank borrowings of the Company. - Shareholders can expect to benefit from an average annual interest cost saving of £455,000 (before taking into account the costs of arranging the facility and breaking the existing interest rate swap referred to above and assuming the same amount is drawn down under the facility). - The refinancing will extend the repayment date of the Company's borrowings from 2014 to 2017. - The structure of the new facility retains the existing flexibility for the Company and its investment manager actively to manage the property portfolio and to pay dividends to shareholders. Enquiries: Ian McBryde/Scott MacraeF&C Asset Management plc020 7628 8000 Douglas ArmstrongDickson Minto W.S.020 7628 4455 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BREI.L