Picton Property has entered into a five year GBP27 million revolving credit facility (“RCF”) with Santander Corporate & Commercial Banking.
The RCF, which is similar to the facility set up in March 2015, will provide the Group with greater operational flexibility. In addition to existing undrawn facilities, it can be used to meet the repayment of the 7.25% Zero Dividend Preference Shares (“ZDPs”) that mature in October 2016, as well as providing the additional firepower to make opportunistic acquisitions.
The terms of the facility allow for it to be repaid and redrawn over the life of the loan as required. This will enable Picton to better manage its gearing position and if appropriate provides the flexibility to reduce gearing using proceeds from any future asset disposals.
Secured across four assets, the RCF has a nominal non-utilisation fee of 70 basis points, equivalent to GBP0.19 million per annum. Once drawn, it will incur an interest charge currently equivalent to 2.3% per annum, reflecting 175 basis points over 3 month LIBOR.
If the facility is used to repay the ZDPs in October, it will significantly reduce the Group’s overall annual cost of debt by GBP1.3 million, resulting in a 7% increase in dividend cover per annum on a pro forma basis.
As at today’s date, in total the Group has access to GBP37.2 million of undrawn facilities.
PCTN : Picton Property has £27m credit facility