Custodian REIT announces new £50m term loan facility

Custodian REIT has announced that it has entered into an agreement with Aviva Investors Real Estate Finance (Aviva) for Aviva to provide it with a new term loan facility of £50m. The facility comprising two tranches: Tranche 1 is for £35m and Tranche 2 is for £15m. Custodian REIT says that it drew down Tranche 1 on 6 April 2017, which is repayable on 6 April 2032 with a fixed rate of interest of 3.02% per annum payable on the balance. Tranche 2 is available for draw down on or before 5 October 2017 with a fixed rate of interest payable on the balance, calculated at the same margin as Tranche 1 above the prevailing Treasury 4.25% 2032 gilt rate on the date of draw down.

Custodian REIT says that, following agreement of the New Loan, the Company has £150 million of agreed debt facilities comprising:

• A £35 million revolving credit facility (RCF) with Lloyds Bank plc expiring in November 2020, with a maximum loan-to-value (LTV) of 50% and attracting annual interest of 2.45% above three-month LIBOR;
• A £20 million term loan with Scottish Widows Limited repayable in August 2025, with a maximum LTV of 45% and attracting fixed annual interest of 3.935%;
• A £45 million term loan with Scottish Widows Limited repayable in June 2028, with a maximum LTV of 45% and attracting fixed annual interest of 2.987%;
• A £35 million term loan with Aviva repayable in April 2032, with a maximum LTV of 50% and attracting fixed annual interest of 3.02%; and
• A £15 million term loan facility with Aviva repayable 15 years from the date of drawdown, with a maximum LTV of 50%.

It says that its debt facilities have a weighted average term of 10.1 years, a weighted average cost of 3.1% per annum and 23% of the available facilities are at a variable rate of interest.

Following drawdown of Tranche 1 custodian REIT says that it has cash and undrawn facilities of £78.0 million available to deploy, which will be used to acquire £14.1 million of properties currently under offer and in solicitors’ hands, with the balance expected to be significantly invested in other commercial properties within a period of three to six months. Net gearing is 13.9%, which the company says is expected to rise to 17.0% on completion of the purchase of the Pipeline Properties, with the Company’s objective to increase gearing towards a ratio of 25% loan to value.

Custodian REIT announces new £50m term loan facility : CREI