Debt Refinancing

29 March 2022

Picton Property Income Limited

(“Picton”, the “Company” or the “Group”)

LEI: 213800RYE59K9CKR4497 

Debt Refinancing

Picton secures additional funding and improves maturity profile

Picton has increased and extended one of its long-term debt facilities, in a refinancing transaction that improves the debt maturity profile, provides additional funding and reduces the overall cost of fixed rate debt within the Group.

Background

Picton has two principal fixed rate, long-term debt facilities totalling £165 million and a revolving credit facility that currently has £31 million drawn.

One of the long-term facilities totals £80 million and matures in 2027 with a fixed rate of 4.1%.

New facility

Picton has restructured this existing facility and secured an extra £49 million of new borrowings, increasing it to £129 million.

The new borrowings are fixed at a rate of 3.25% and the existing £80 million tranche has had the interest rate reduced by 20% to this same level.

In addition, the maturity date of the existing loan has been extended from July 2027 to July 2031, to coincide with the new additional borrowings.

Use of proceeds

The proceeds will be used to substantially repay the revolving credit facility, which was recently drawn to fund property acquisitions. The remaining proceeds will be used to fund identified acquisitions and capital projects within the portfolio. 

By repaying the revolving credit facility, this will provide the Group flexibility to use the undrawn funds to take advantage of further growth opportunities when identified, whilst minimising cash drag.

Financial implications

Following the transaction :-

• Overall Group borrowings increase from £196 million to £219 million
• The proforma LTV is 22%
• Picton will have £65 million available for investment
• The fixed rate facilities have an average maturity profile of ten years 
• The weighted average interest rate of the drawn debt will be reduced from 4.0% to 3.7%
• The redemption fee to reset the interest to a lower rate on the existing £80 million loan is £4 million
• There will be future interest savings of £0.7 million per annum on the £80 million tranche of debt
• The proforma December NAV reflecting these changes has reduced by 0.8 pence to 112.0 pence per share

Michael Morris, Chief Executive commented:

“With these changes we have provided additional funding and operational flexibility, which will assist with our growth ambitions.  At the same time, we have reduced our debt costs and fixed them for a longer period, which we think is prudent in the current environment.”

For further information,

Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150, [e-mail]

Picton
Michael Morris, 020 7011 9980, [e-mail]

Note to Editors

Picton, established in 2005, is a UK REIT. It owns and actively manages a £790 million diversified UK commercial property portfolio, invested across 46 assets and with around 350 occupiers (as at 31 December 2021).

Through an occupier focused, opportunity led approach to asset management, Picton aims to be one of the consistently best performing diversified UK focused property companies listed on the main market of the London Stock Exchange.

For more information please visit: www.picton.co.uk

ENDS