LXi REIT gets loan facility – the Board of LXi REIT plc says the company has signed a 12-year, fixed rate, interest only loan facility of GBP55 million with Scottish Widows, acting in partnership with Lloyds Bank Commercial Real Estate.
The Facility is repayable on 3 July 2029 and has a fixed all-in rate payable of 2.93% per annum, for the duration of the 12-year loan term. This fixed interest rate is just under 300 basis points lower than the company’s average net initial property yield of 5.9%. The Facility is secured against both the built and forward funded assets acquired by the company.
If they borrow the whole amount, this equates to a loan-to-value ratio of 30% – in line with the fund’s medium-term target and a maximum level of aggregate borrowings of 35% of gross assets.
The Facility provides the debt resource needed to support the acquisition of additional assets, comprising both forward funded and built properties. They have deployed 85% of its net equity and is in solicitors’ hands on additional acquisitions which will fully absorb both the balance of its equity and also the debt finance under the Facility.
The IPO prospectus, published on 6 February 2017, contains details of a Placing Programme that allows them to issue up to 200 million ordinary shares in the period to 5 February 2018. The Board is considering, subject to prevailing market conditions, utilising this Placing Programme in the second half of the current financial year and further details will be published in due course.
Simon Lee, Partner of LXi REIT Advisors Limited, commented: “We are delighted to have entered into this 12-year loan facility with Scottish Widows, which provides the Company with a long-dated senior financing package at a very low fixed rate and offers the Company substantial operational flexibility. The rate is highly accretive to the Company’s anticipated future dividend and mitigates potential interest rate and refinancing risks for the 12-year period. Scottish Widows’ involvement, and their stated appetite to grow further with the Company, is very encouraging.”
LXI : LXi REIT gets loan facility