New Term Loan

RNS Number : 3475A

Custodian REIT PLC

06 June 2016

 

6 June 2016

Custodian REIT plc

("Custodian REIT" or "the Company")

New Term Loan

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the completion of a new term loan facility. 

On 6 June 2016, the Company and Scottish Widows Limited, with Lloyds Bank plc acting as agent, entered into an agreement for Scottish Widows Limited to provide the Company with a new term loan facility of £45 million, repayable on 6 June 2028 ("the New Loan").  Under the terms of the agreement, the Company will pay fixed interest of 2.987% per annum on the balance.  

Part of the proceeds of the New Loan have been used to repay a £20 million, five year variable rate term loan plus an advance of £3.7 million drawn on the Company's revolving credit facility ("RCF"), with no early exit costs incurred.  Following these transactions, the Company operates:

·     A £35 million RCF with Lloyds Bank plc expiring in November 2020, with a maximum loan-to-value ("LTV") of 50% and attracting annual interest of 2.45% above three-month LIBOR;

·     A £20 million term loan facility with Scottish Widows Limited repayable in August 2025, with a maximum LTV of 45% and attracting fixed annual interest of 3.935%; and

·     A £45 million term loan facility with Scottish Widows Limited repayable in June 2028, with a maximum LTV of 45% and attracting fixed annual interest of 2.987%.

The Company's debt facilities have a weighted average term of 8.6 years, a weighted average cost of 3.2% per annum and 65% of the available facilities are at a fixed rate of interest.

The Company has cash and undrawn facilities of £60 million available to deploy, which will be used to acquire £13.7 million of properties currently under offer and in solicitors' hands ("the Pipeline Properties"), with the balance expected to be significantly invested in other commercial properties within a period of three to six months. 

Net gearing¹ is 12.0%, which will rise to 15.8% on completion of the purchase of the Pipeline Properties, with the Company's objective to increase gearing towards a ratio of 25% loan to value.

Commenting on the recent transactions, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:

"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.  The flexibility to repay the RCF and manage the facility limit to minimise non-utilisation fees further demonstrates the efficiency of the Company's debt structure.     

"In addition to the Pipeline Properties, we are seeing an increasing number of acquisition opportunities within our target lot size and are tracking circa £50 million of further opportunities that fit our investment objectives." 

¹ Gross borrowings less unrestricted cash divided by property portfolio valuation.

-Ends-

For further information, please contact:

Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli	Tel: [phone]
	www.custodiancapital.com

Numis Securities Limited
Nathan Brown / Hugh Jonathan	Tel: [phone]
	www.numiscorp.com

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.co.uk

Notes to Editors

Custodian REIT plc is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014.  Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is characterised by smaller lot sizes. 

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By targeting smaller lot size properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth. 

Custodian Capital Limited is the discretionary investment manager of the Company. 

For more information visit www.custodianreit.com and www.custodiancapital.com.

 

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