ING backs Spain’s Testa with €130m loan

The Dutch bank has provided a seven-year facility priced at 1.6% to the residential rental company.

Spanish multi-family housing firm Testa Residencial has signed a €130 million loan with ING Real Estate Finance.

The loan has a seven-year bullet maturity and an interest cost of approximately 1.6 percent, including 100 percent hedging, Testa said.

The facility will finance future acquisitions by the firm, including the €228 million purchase of a portfolio of 1,458 apartments from BuildingCenter, the real estate subsidiary of CaixaBank, which is expected to close in the coming months.

Testa has also obtained a credit rating of ‘BBB’ with a positive outlook from rating agency Standard & Poor’s. The preliminary rating is subject to completion of the company’s initial public offering, which will likely place in June.

S&P noted a “prudent” Testa’s financial policy, with a “strong” interest coverage ratio and a loan-to-value objective of less than 35 percent.

Wolfgang Beck, CEO of Testa, noted that both the ING loan and receiving an investment-grade rating provide “more flexibility to attract financing from capital markets in the future, as a complement to obtaining bank financing”.

Currently, Testa has a portfolio of 9,244 homes with a prominent presence in some of the main Spanish metropolitan areas, mainly in Madrid.