NextEnergy Solar Fund (NESF) has extended its existing £70m short-term revolving credit facility (RCF) with Santander, that was previously due to expire in June 2024. The £70m RCF extension is now available until June 2025 and benefits from improved terms with a margin of 150bps over SONIA (Sterling Overnight Index Average) compared with 160bps over SONIA under the earlier terms. As at 7 May 2024, the company’s total interest cost for any amount drawn under this RCF was 6.7% due to SONIA being at 5.2%. This latest announcement follows on from NESF’s recent announcement of the extension of its other RCF facility of £135m to June 2026 with two additional 12-month extension options available at NESF’s sole discretion. NESF says that these two RCF extensions demonstrate the appetite of its banking partners to provide debt to NESF at attractive terms and underline its belief that debt remains readily available to it “as a leading specialist in the solar energy and energy storage sector”.
NESF comments that the RCFs remain an important component of its capital structure and provide it with the flexibility to pursue value-accretive investments or to make repayments to the RCFs from operating and other cash flows. NESF reminds investors that it continues to prioritise its capital recycling programme and expects to use the proceeds from the programme to pay down existing borrowings under its RCFs. As at 31 December 2023, NESF had drawn £163m from its £205m short-term RCFs and had an unaudited Gross Asset Value (GAV) of £1,173m. Gearing levels remain well within its investment policy limit of up to 50% of GAV and, as of 31 December 2023, its financial debt gearing was 28.8% and total gearing, which includes the fixed coupon preference shares, was 45.7%.