Phoenix Spree Deutschland agrees new €240m loan facility – Phoenix Spree Deutschland, the UK listed investment company specialising in Berlin residential real estate, has completed a new €240m loan facility.
The new facility was agreed with Natixis Pfandbriefbank AGand comprises of two tranches, one being for €190m and the other for €50m.
The refinancing follows a strategic review of the company’s liability structure and will increase its loan-to-value ratio to close to 40%, while introducing more strategic flexibility.
The €190m facility will be used to partly refinance the company’s existing debt of €119m. It is a seven-year, interest-only loan (eliminating the previous amortisation obligations) with a margin of 115bp over 3-month Euribor, floored at zero. The outstanding swap portfolio was restructured to provide interest rate hedging to match the new loan maturity.
The company’s loan-to-value (excluding cash held on balance sheet) following drawdown has increased from 28.6% to 39.2%, while the overall cost of financing decreased from 2.19% to 2.13%. The weighted average financing term remained unchanged at seven years.
The remainder of the refinancing facility will be used to fund working capital and take advantage of other market opportunities.
The additional €50m facility is available for drawdown over a period of 24 months and carries a commitment fee of 57.5bp. On utilisation, the drawn amounts will be subject to the same terms as the refinancing facility.
Rent control update
Phoenix Spree has also provided an update on the proposed ‘Mietendeckel’ or rent cap in Berlin. A consultative process that will allow representations to be made from all industry participants, including landlords, is now underway. A Berlin Senate resolution on the final draft is currently scheduled to take place in mid-October, with implementation of the new rules expected in January 2020.
The company said the “final form” of the rent-cap proposals still lack clarity. However, it is actively planning its strategic response to the proposals.
The company remains of the view that the rent proposals are unconstitutional and there are mounting legal arguments to support the view that State law cannot supersede Federal law.
PSDL : Phoenix Spree Deutschland agrees new €240m loan facility
Click here to subscribe for free equity research on investment trusts, funds and listed companies.