Empiric Student Property has signed a £70 million (€78 million) revolving credit facility with Lloyds Bank Commercial Banking to fund future purchases of student accommodation.
The credit facility has an annual margin of 1.75 percent above three-month LIBOR and is repayable three years from the date of agreement, with the possibility to be extended to a total of five years by mutual consent. It is secured against a portfolio of operating assets in prime UK university cities, which are held as a lending group, through a subsidiary of the company.
Empiric, which owns and operates high-end student accommodation across the UK, said it will use the facility to fund the purchase of properties or to refinance the acquisition costs of such assets.
“This new facility provides the company with further flexibility in financing future acquisitions, within our target loan-to-value parameters,” said Lynne Fennah, Empiric’s chief financial officer.
Empiric said it will maintain a conservative level of borrowing, with a target of 35 percent and no more than 40 percent of the company’s gross asset value.
In September last year, Empiric sourced £30.63 million of development finance from Royal Bank of Scotland to fund the construction of a portfolio of UK student housing schemes.