Standard Life Investments Property Income refinances debt facility

Standard Life Investments Property Income Trust has announced that it has entered into an agreement to extend £145m of its existing £155m debt facility with The Royal Bank of Scotland. The debt facility consists of a £110m 7 year term loan and a £35 million 5 year revolving credit facility. The Revolving Credit Facility may, by agreement, be extended by one year on two occasions. £145m has been drawn down by the Group and its loan to value currently stands at approximately 29.5%, which the company says is in line with the Board’s stated target level of between 25% and 35% loan to value. They also say that the interest cover for the Group is now approximately 780% per cent.

Interest is payable on the Term Loan at LIBOR plus 1.375% and on the Revolving Credit Facility at LIBOR plus 1.2%. This company says that this equates to a rate of 2.725% on the Term Loan and 1.78% on the Revolving Credit Facility (based on LIBOR of 0.58% as at 27 April 2016), which gives a current blended rate of 2.5% (based on the Revolving Credit Facility being fully drawn). The loan is secured over the Group’s existing property portfolio including new security over the majority of the 22 properties acquired in December 2015.

The company says that the restated facility agreement includes terms that are typical for a facility of this nature, including loan to value (a maximum of 60% for the first five years and 55% thereafter) and interest cover ratio covenants (not less than 175% for the term of the facility) and the ability to substitute properties in the security pool. The Revolving Credit Facility is to be available for general purposes and may be utilised to fund the acquisition of new assets by the Group. The company says that the Revolving Credit Facility will allow aggregate debt to be increased or decreased depending on the Investment Manager’s view of the property market and ongoing cash levels within the Group.  It will also provide the Investment Manager with additional finance that can be utilised in a quick and efficient manner should acquisition or asset management opportunities arise. The company says that it has terminated its existing interest rate hedging arrangements entered into in connection with the its previous facility arrangements and terminated and replaced its existing interest rate hedging arrangements with RBS. The cost of terminating these hedge positions was £2,735,000, all of which was fully reflected in the 31 December 2015 NAV.

Standard Life Investments Property Income Trust refinances debt facility :SLI