NewRiver REIT has sourced £430 million (€473 million) of new unsecured debt facilities, which will replace £414 million of its existing secured loans.
The new facilities were provided by Barclays, HSBC, Royal Bank of Scotland and Santander. HSBC acted as agent for the facilities, while Rothschild advised NewRiver on the refinancing.
The new debt includes a £165 million term loan and a £215 million revolving credit facility, with an initial maturity of five years, and the possibility to be extended to a maximum of seven years.
The remaining £50 million is a term loan with a maturity of 18 months, through which the REIT can diversify sources of unsecured debt funding.
The margin payable on all the new unsecured facilities is 185 basis points, NewRiver said. As part of the agreement, the REIT is required to put in place interest rate hedging in respect of a minimum of 75 percent of aggregate drawn debt under the term facility.
The REIT will use the debt facilities to reduce debt costs, increase flexibility and debt maturity. On the basis that the revolving credit facility is fully drawn, NewRiver’s pro forma all in cost of debt will reduce to below 3 percent, from 3.5 percent as at 31 March 2017, as debt maturity will increase to 5.8 years, from 2.5 years as at 31 March 2017.
“We have been able to achieve all of this with minimal breakage costs and by utilising the strong banking relationships we have established over many years,” said CFO Mark Davies.