Big Yellow agrees £275m of new finance

Big Yellow Group has put in place three new loans reducing its average cost of debt and extending its maturity.

The London-listed self-storage company has agreed a £145m, five-year facility with Lloyds Bank and HSBC Bank. Half is a term facility and half is revolving. The term loan has a margin of 175 basis points and the revolving facility, 150bps. Thisresults in a 75bps reduction from the company’s previous facility.

M&G Investments is providing a £70m facility; it carries a term of seven years, which can occur at any time up to 29 June 2015. The loan is secured against a portfolio of 15 self storage centres, and the average cost at the current rate of LIBOR will be 3.75%.

Big Yellow has also agreed a short-term bridging loan of £70m with Lloyds, which is repayable immediately on the drawdown of the M&G loan.

John Trotman, chief financial officer of Big Yellow said:

“[The new financing arrangements] further diversified our lending pool through the new loan from M&G.  These committed facilities, coupled with our existing £95.7m loan from Aviva (remaining term 13 years), have significantly increased the average unexpired term of our debt facilities to 7.8 years.  In total we now have £238m drawn out of our total committed facilities.

“As a result of this refinancing, and prior to the drawing of the M&G facility, our average cost of debt decreases from 4.6% to 3.7%. Following the M&G facility being drawn and the Lloyds bridging loan being repaid we would expect the average cost to be approximately 4.2%, based on the current levels of LIBOR.”