British Land has put in place a new £485m revolving credit facility at a margin of only 90bps.
The unsecured facility is the lowest arranged in the UK by a listed real estate firm this cycle and is a reduction of 25bps on the facilities it is replacing. The margin beats the previous lowest of 105bps, arranged by Great Portland Estates in October last year.
British Land has also cancelled £400m of facilities which it said is to reduce costs and increase flexibility within the portfolio. It said that holding costs had been “significantly reduced, lowering overall financing costs”.
The five-year debt may be extended to seven years on the company’s request and on approval of each bank’s approval. The banks involved are: Royal Bank of Scotland, Santander, Bank of Tokyo-Mitsubishi, Barclays Bank, Bank of China, Crédit Agricole and Handelsbanken.
The new arrangement sees a £560m revolving credit facility replaced, which would have matured in May 2016, and is an extension and re-pricing of a £310m revolving credit facility which was due to expire in May 2018.
Lucinda Bell, chief financial officer at British Land said: “We actively manage our debt portfolio to ensure that our finance is competitively priced and appropriate for our strategy. This facility extends the term of our strong and well diversified portfolio, whilst the £400m cancellation reduces cost and is consistent with our policy of maintaining flexibility and not gearing up on yield shift. We are very pleased with the level of bank support we have received on this transaction, reflected in a margin that is 25bps lower than the comparable facilities we agreed last year.”