Primary Health Properties announces €70m secured note issue – Primary Health Properties (PHP), a leading investor in modern primary healthcare facilities in the UK and Ireland, has announced that a wholly owned subsidiary has issued new senior secured notes for a total of €70m at a fixed rate of 1.51% with a maturity of 12 years.
The notes represent PHP’s second euro-denominated transaction in the private placement market. The company adds that the use of euro-denominated debt also provides a natural hedge against movements in exchange rates for its portfolio of assets in Ireland.
The proceeds of the issue will be partially applied to repay and cancel a €32.6m facility with Bank of Ireland, of which €26.2m was drawn at a 3.0% margin, and acquired as part of the merger with MedicX in March 2019. The balance will be applied to finance the developments currently on site in Ireland and to repay euro-denominated tranches of PHP’s existing revolving credit facilities, which are available to be redrawn in either sterling or euros in the future to fund the company’s strong pipeline of acquisition opportunities both in the UK and Ireland.
Cost of debt down and maturity profile up following issue
The secured note issue extends the group’s debt maturity profile as well as reducing the group’s average cost of debt which now stands at 3.68%.
Richard Howell, finance director of PHP, commented: “Today’s announcement demonstrates further progress in delivering the finance cost saving synergies outlined at the time of the merger with MedicX (click here to read news on this), successfully reducing the group’s average cost of debt since completion in March 2019 by 32bps to 3.68%.
We will use the funds to progress our disciplined strategy of growing PHP’s portfolio, particularly in Ireland, through the acquisition of well-priced, strategic assets that will provide strong income returns and the potential for asset growth whilst maintaining a prudent level of gearing.”
PHP: Primary Health Properties announces €70m secured note issue
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