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F&C UK Real Estate finalises new borrowing arrangements

F&C UK Real Estate, managed by Ian McBryde (pictured), announced in its interim results, released on 29 September, that the Board had been considering refinancing the company’s existing loan facility with Lloyds Bank, which is due for repayment in January 2017, and had agreed terms to refinance this through a new long-term term loan facility with Canada Life Investments and a new revolving credit facility with Barclays Bank. The board has now announced that executed a conditional £90m 11 year non-amortising term loan facility agreement with Canada Life Investments and a £20m 5 year revolving credit facility agreement with Barclays Bank.

Under these new facilities the Group will be entitled to draw down up to £110m to finance the repayment of the £102m term loan facility provided by Lloyds Bank, which was due for repayment in January 2017. There is no early repayment penalty in respect of the existing facility with Lloyds but the Group will terminate its existing interest rate hedging arrangements entered into in connection with the existing facility and is to be liable for the cost of breaking the relevant interest rate swap. This was already accounted for as a liability, net of accrued interest of £5.7m at 30 September 2015. The company says that no further swap is required.

The Board further confirms that it has today fixed the interest rate that will be payable over the term of the loan with Canada Life Investments at the all-in rate of 3.36 per cent. per annum (including the yield on the relevant UK Gilt) and the interest rate that will be payable in respect of the revolving credit facility with Barclays Bank at the rate of 1.45 per cent. per annum over 3 month LIBOR. It is the Company’s intention that the debt will be drawn down on or around 13 November 2015.

F&C UK Real Estate finalises new borrowing arrangements : FCRE

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