Great Portland Estates has secured a new £450m revolving credit facility from a club of seven banks.
The specialist London REIT has been provided with an unsecured, five-year loan from RBS, Santander, HSBC, Lloyds, Crédit Agricole CIB, Wells Fargo and Bank of China. The company also has an option to extend the term by a further two years.
The banks agreed a margin of 105 bps above Libor. The loan replaces two facilities of £350m and £150m which were due to mature in November 2015 and February 2017 respectively.
The cheap finance shows the intense competition from within the banking community to fund high quality central London assets and good sponsors.
Nick Sanderson, finance director of Great Portland said: “We are pleased to have arranged this competitively priced facility with our relationship banks. By taking advantage of current market conditions, this facility adds further flexibility to our already strong and well diversified debt book. The level of support for this facility is a continued vote of confidence in our focused business model, prime central London property portfolio and conservative capital structure.”
Wells Fargo’s tie-up with Great Portland re-establishes a previous relationship with the former Eurohypo team and the Bank of China relationship is new. The remaining banks were part of clubs that provided the expiring facilities.
The company now has £400m of undrawn facilities with its next debt maturity date not until June 2018.
Great Portland plans to decrease the size of its portfolio, which includes 245 Blackfriars Road (pictured), by around £400m within the next year and £1.2bn within the next seven years having bought aggressively and developed throughout the downturn.