Aviva takes flexible approach with Helical debt package

The insurer has provided a mix of fixed and floating-rate debt to the UK property firm.

Aviva Investors has used capital from three separate lending mandates to provide a £124 million (€141 million) financing to UK property investor Helical, as it continues to expand its range of real estate financing products.

The UK insurer has provided a debt package which refinances The Shepherds Building in London, to which it is the existing lender, and also refinances two additional office assets, The Loom in London and Churchgate and Lee House in Manchester.

The debt facility, which increases Aviva’s loans to Helical by around £45 million, combines fixed rate and floating-rate debt through three of Aviva’s managed mandates.

The finance is due for repayment in December 2024 and carries an initial interest rate of 3.28 percent, with interest on £31 million varying with movements in three-month Libor. The loan provides “both certainty and flexibility in a single facility,” said Gregor Bamert, head of Aviva’s real estate finance.

“This increased facility provides the long-term commitment and flexibility that we are looking for in our debt providers and its timing enables us to lock into current low finance rates,” Tim Murphy, finance director at Helical, added.

The secured portfolio covers more than 500,000 square feet generating rents of circa £13 million per year.

Helical recently announced its intention to redeem its £80 million bond issue with a coupon of 6 percent on 2 March 2018, in line with its plans to reduce debt and its annual finance costs.

In September 2017, Helical repaid its fully drawn £102 million facility with pbb Deutsche Pfandbriefbank, which was due to be repaid in August 2020.