Completion of Refinancing

RNS Number : 7008A

Primary Health Properties PLC

03 April 2012

 



PRIMARY HEALTH PROPERTIES PLC

A specialist REIT providing Primary Care Accommodation for the NHS

Primary Health Properties PLC ("PHP", the "Group" or the "Company"), one of the largest providers of modern primary healthcare facilities, announces the completion of the refinancing of its banking facilities with Royal Bank of Scotland ("RBS"), Santander Corporate Banking ("Santander") and Allied Irish Banks plc ("AIB").

New Club facility

PHP has today entered into a new £175 million club debt facility (the "Club Facility") with RBS and Santander.  This facility is for a four year term and comprises of a term loan of £125 million and a revolving debt facility of £50 million.  The key covenants for the facility are an overall Loan to Value maximum of 65% and a minimum Interest Cover requirement of 1.4 times. 

Separation of AIB facility

As part of the completion of the Club Facility detailed above, the existing bilateral loan with AIB has been restructured to provide a separate, specific security pool.  A sum of £3 million has been repaid from the loan as part of this process leaving a balance of £27 million.  All terms and conditions of the loan remain unchanged and the loan will continue to run through to its maturity in January 2013.

Group Interest Rate Derivatives

The above transactions have been completed without the need to break or pay down any of the Group's interest rate derivative portfolio.  In order to guarantee the required minimum level of derivative cover for the duration of the Club Facility, the Company has taken advantage of favourable market conditions to buy out the cancellation option on interest rate swaps with a nominal value of £88 million, for the duration of the Club Facility.  The cost of this buy out totalled £60,000.

The above transactions, when combined with the new debt facilities secured in 2011, have extended the weighted maturity of the Group's debt facilities by over three years and provide the stable capital base and headroom to enable further asset acquisitions to grow the portfolio.

Average margins on the Group's debt facilities now stand at 230 basis points, an increase from 70 basis points in 2011 with an average facility maturity of 5.6 years.

Health and Social Care Act 2012

The Health and Social Care Bill received Royal Assent on 27 March 2012 becoming the Health and Social Care Act 2012. This removes the uncertainty about the structure of the NHS which has impacted the number of approvals of new medical centre developments.

Harry Hyman, Managing Director of Primary Health Properties, commented:

"The Board is delighted to have completed this refinancing.  The new banking facilities have been secured at competitive rates and without the need to reduce the amount hedged in the Group's swap portfolio.  The Board believes that securing this new facility, in addition to the new £75 million Aviva debt facility announced last November, is a real achievement given the current volatility and lack of liquidity in banking markets. The Company now has secure debt facilities that provide resource for the acquisitions of additional fresh assets."

For further information, please contact:

Harry Hyman/Phil Holland

Primary Health Properties PLC

T: [phone]

M: [phone]/ [phone]

[e-mail]/[e-mail]

David Rydell/Victoria Geoghegan/Elizabeth Snow

Pelham Bell Pottinger

T: [phone]

This announcement may contain forward looking statements. By their nature forward looking statements involve risk and uncertainty because they relate to future events and circumstances.

These statements reflect the knowledge and information at the time of the release of this announcement. Nothing in this statement should be construed as a profit forecast or estimate

Apart from the information contained in this statement there have been no material events or transactions affecting the Group during the period.

 

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