Ground Rents Income Fund plc
(the "Company")
LOAN REFINANCING
The Company is pleased to announce that it has refinanced its existing £19.5 million loan with Santander UK plc on the following terms:
· A new five year, £25 million facility with Santander UK plc comprising a £12.5 million term loan and a £12.5 million Revolving Credit Facility (RCF)
· The facility is at a margin of 1.85% per annum above 3 month LIBOR, a reduction of 45 basis points compared to the current margin of 2.30%
· Loan term extended from its current maturity of November 2021 to January 2025
· Total initial amount drawn will be approximately £15.5 million comprising the term loan and £3.0 million of the RCF
· A new interest rate swap will be put in place to hedge the interest rate on the £12.5 million term loan and approximately £5.0 million of the RCF is likely to be hedged via an interest rate cap
· Based on a total initial amount drawn of £15.5 million the loan-to-value on the charged pool of assets will stand at 24% versus a covenant of 45%, which increased from 40% as part of the refinance, providing undrawn headroom of £9.5 million (the Company's overall borrowing limit of 25% of gross assets remains unchanged)
The refinancing delivers the following benefits to the Company:
· Interest rate is reduced from 3.37% on the existing facility to approximately 2.76% per annum generating an interest rate saving of approximately £120,000 per annum (based on existing drawn amount of £19.5 million and hedging having been agreed at current swap / Libor rates)
· Removes refinancing risk in 2021 and capitalises on current low interest rates
· The increased facility amount and RCF element enables the Company to maximise balance sheet efficiency and provides operational flexibility
· Following the refinancing the Company will have £67.2 million of uncharged assets and a consolidated net loan-to-value of approximately 11.3%, based on the independent valuation and financial position as at 30 September 2019
James Agar, Fund Manager, commented:
"The refinance was a key objective identified in the review of the Company's strategy. The refinancing with Santander increases net income and reduces risk with longer term debt. The RCF component provides important operational flexibility and capacity to take advantage of opportunities in the market."
Contacts
Schroder Real Estate Investment Management Limited
James Agar / Matthew Riley
020 7658 6000
N+1 Singer (Broker)
James Maxwell / Ben Farrow
020 7496 3000
Tavistock (Media)
James Whitmore / Jeremy Carey
020 7920 3150
Appleby Securities (Channel Islands) Limited (Sponsor)
Andrew Weaver
01481 755 600
