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L&G secures £150m to refinance leisure fund

The Royal Bank of Scotland (RBS) has provided a £30m, floating rate term loan and a £60m revolving credit facility, both for five-years, to refinance Legal & General (L&G) Property’s leisure fund. L&G Investment Management is also providing a £60m, five-year term loan, initially floating rate but fixed from Q4 2016, taking the total facility to £150m at an all-in cost below 2.7%.

Legal & General (L&G) Property has secured £150m at an all-in cost below 2.7% from L&G Commercial Lending Limited (CLL) and the Royal Bank of Scotland (RBS) to refinance its £421m Leisure Fund.

RBS has provided a £30m, floating rate term loan and a £60m revolving credit facility, both for five-years. L&G’s real estate business is supplying a £60m, five-year term loan, initially floating rate but fixed from Q4 2016.

Millennium Leisure Park in Greenwich, London
Millennium Leisure Park in Greenwich, London

The refinancing replaces an earlier £111m loan from RBS due to expire in October 2016.

“The Leisure Fund contains some exceptional assets and provides us with excellent security,” said Steve Boyle, lending manager at L&G CLL. “We are delighted to be teaming up again with RBS to provide a lending package to one of L&G’s property funds, after working together on the re-financing of L&G’s Industrial Property Investment Fund in 2014.”

Andy Banks, finance director at L&G Property, said: “The refinancing not only realises an all-in cost of borrowing of below 2.7% which will enhance future returns, but provides the fund with capacity to take advantage of acquisition opportunities in the market.”

L&G Property’s Leisure Fund Limited Partnership, formed in 2002 and held through a Jersey Property Unit Trust, has over £421m of assets under management.

It comprises 11 properties in total across the UK, including the Millennium Leisure Park in Greenwich, London, and a development scheme in Bournemouth. The new loan is secured against 10 of the assets.

L&G said the initial drawdown is expected to be around £112m, a preliminary loan-to-value ratio of around 30%. The cash will help fund the Bournemouth leisure park development.

Investors in the fund include Aviva Investors, CBRE Global Investors, DTZ and Schroders. In 2014, the fund delivered a total return of 17.6%.

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