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QuotedData’s morning briefing 28 June 2023

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In QuotedData’s morning briefing 28 June 2023:

  • Atrato Onsite Energy (ROOF) has signed a power purchase agreement (PPA) to sell the electricity generated by Project Skeeby, a 50MW solar PV project in Richmond, North Yorkshire. As announced in April, Skeeby is a recent acquisition and is currently under installation, with an expected energisation date of March 2024. ROOF has entered into a 3-year utility PPA with OVO Energy Limited (OVO Energy), part of the OVO group; the third largest supplier of domestic energy in the UK. ROOF is expected to supply 49 GWh of clean energy per annum to OVO Energy, providing 9,500 tonnes of CO2 emission savings per annum, equivalent to powering 17,000 UK homes or planting 380,000 trees. ROOF says that the PPA will provide it with a 3-year revenue stream at a set price with fixed annual uplifts for the energy produced by Skeeby.
  • Ecofin US Renewables Infrastructure (RNEW) has announced that its wholly-owned subsidiary, RNEW Capital, LLC, has completed an amendment and extension to its US$65m revolving credit facility (RCF) with KeyBank, a key lender to the US renewable energy industry. The RCF, which comprises two tranches, has been extended by 12 months. The US$50m tranche has been extended to October 2024 with a rate of SOFR + 2.00% to 18 October 2023 and SOFR + 2.125% thereafter, and the US$15m tranche was extended to October 2025 with a rate of SOFR + 2.25% to 18 October 2023 and SOFR + 2.375% thereafter.
  • AVI Global Trust (AGT) has entered into a preliminary agreement to issue Japanese yen (JPY) 4.5bn fixed rate unsecured debt, for a term of ten years. AGT says that, subject to the final documentation, the annual interest rate on the debt will be 1.44%. The debt will be denominated in JPY and is equivalent to approximately £25m at current exchange rates. AGT already has in issue the following fixed rate debt:
    • £30m 4.184% Series A Sterling Senior Unsecured Loan Notes, due 15 January 2036
    • EUR30m 3.249% Series B Euro Senior Unsecured Loan Notes, due 15 January 2036
    • EUR20m 2.93% Euro Senior Unsecured Loan Notes, due 1 November 2037
    • JPY8bn 1.38% JPY Senior Unsecured Loan Notes, due 6 July 2032

In addition, the company has a JPY12bn multi-currency revolving credit facility, of which JPY8bn is currently drawn down. The company is currently 5% geared on a net basis (105% invested). Assuming that this latest debt issue proceeds as planned, AGT’s weighted average interest on its fixed rate borrowings will be reduced to 2.5%, compared with 2.7% currently. AGT’s board says that it expects to announce the completion of the necessary documentation within five weeks.

  • Schroder European REIT (SERE) has rebased its dividend due to refinancing cost uncertainty. The quarterly dividend will now be at level of 1.48 euro cents per share (down from 1.85 euro cents) and will immediately be covered by earnings. The company’s Loan to Value (LTV) is 32% (gross of cash of €23m) and 23% net of cash. The average cost of its interest-only drawn debt is 2.5%. At the end of 2022 the company refinanced its largest debt facility (€18m) at a 85 basis point margin above Euribor, with no covenants for five years. The rebasing of the dividend will allow the company to take its time deploying its cash reserves into investment opportunities as they arise. The group reported a 6% fall in NAV to 132.4 euro cents per share in the six months to 31 March 2023, mainly due to a 50 basis points outward movement in its portfolio yield, which resulted in a 4.6% like-for-like drop in the value of its portfolio to €220.2m.
  • NewRiver REIT (NRR) has sold the final two assets in its joint venture with Pimco, selling the Kittybrewster Retail Park in Aberdeen and Glendoe and Telford Retail Parks in Inverness for £62.6m (NRR share £31.3m), slightly below the asset value of £64.4m at 31 March 2023. The sale proceeds will be used to reduce NRR’s net debt as at 31 March 2023 by £31.8m (net cash receipt of £19.8m and repayment of secured debt of £12.0m) to £169.5m on a proforma basis which reduces NRR’s LTV to 30.3% on a proforma basis. The disposals bring the total sale receipts from the Napier Joint Venture to £76.0m, reflecting a blended net initial yield of 7.4%. Total receipts are 26% higher than the price paid when the portfolio was acquired in June 2019 from a UK Institution for £60.5m, which reflected a blended net initial yield of 9.8%. Since acquisition the Napier Joint Venture has generated an IRR of 16%.

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