Extension of Debt Facilities

RNS Number : 7576I

Target Healthcare REIT Limited

02 September 2016

 

Target Healthcare REIT Limited

Extension of Debt Facilities

The Board of Target Healthcare REIT Limited (the "Company" and together with its subsidiaries, the "Group") is pleased to announce that it has agreed with The Royal Bank of Scotland plc ("RBS") to amend and restate the terms of its existing £30 million committed term loan and £20 million revolving credit facility (together the "Facilities").

The term of the Facilities has been extended from June 2019 to August 2021. In addition, the amendment also provides an option of two further one year extensions thereafter, subject to the consent of RBS. 

Interest is payable under the Facilities at a rate equal to three month LIBOR plus a lending margin of 1.50 per cent. per annum. This represents a reduction of 50 basis points on the previous margin of 2 per cent. per annum.  There are no other material amendments to the Facilities.

As previously announced, the Group already benefits from an interest rate swap agreement with RBS to fix its interest payments on a notional £21 million of loans to June 2019 at a rate of 0.85 per cent. plus the lending margin. On the basis the Facilities are fully drawn, this effectively fixes the interest payments on 42 per cent. of the Company's available debt at a newly lowered fixed rate of 2.35 per cent.

As at 31 August 2016 the Group's borrowings were £21 million, giving a loan-to-value ratio of 9.4 per cent. (calculated as total gross debt as a proportion of gross property value. As the Group expects to invest the majority of its current cash balance in new care homes, cash has been excluded from the calculation.).

The new Facilities will allow the Group to manage its capital structure in line with its investment policy. Namely, that borrowings over the medium term will represent approximately 20 per cent. of the Group's gross assets at the time of draw down, whilst the revolving credit facility will also provide shorter-term flexible capital to fund the growth of the Group's property portfolio.

In the event that the full amount is drawn down under the Facilities the Group's gearing is expected to be approximately 17 per cent. of the Group's gross assets. 

Enquiries:

Kenneth MacKenzie

Target Advisers

01786 845 912

Mark Young, Neil Winward, Tom Yeadon, Roger Clarke

Stifel Nicolaus Europe Limited

020 7710 7600

Martin Cassels

R&H Fund Services Limited

0131 550 3760

Fiona Harris/Sam Emery

Quill PR

020 7466 5058 / 020 7466 5056

Important information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

 

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