ING’s listed UK Real Estate Income Trust has taken further steps to cut its debt by buying back some of its AAA-rated debt on the secondary CMBS market, at a 5% discount, from two vendors. The deal and cancellation of the notes for £14.25m cuts the outstanding loan balance to £175m and was made using surplus cash.
Michael Morris, the trust’s fund manager, said: “At the start of last year, values were tumbling and we had to restructure the securitised debt. In July we agreed to repay £35m of debt through asset sales and we created the ability to do buybacks and cancel debt.
“As an income fund, this will enhance our income and dividend cover. Having used this cash we will consider recycling some capital by taking advantage of the strong selling market and selling into it, whereas before we would have been constrained by our debt.”