Santander and RBS give PHP new debt treatment

Royal Bank of Scotland and Santander have refinanced Primary Health Properties’ banking facilities. The banks have lent £175m, comprising a £125m term loan and a £50m revolving facility. Both banks were already lenders to PHP but an existing bilateral loan with Allied Irish Banks has been restructured.

Key covenants of the four- year facility are a 65% loan-to-value ratio and 1.4 times interest cover. The higher margin means that the group’s average margin on debt is now 230 basis points, compared to 70bps previously.

The refinancing was put in place without the need to break or pay down interest rate swaps. PHP took advantage of favourable market conditions to buy out the cancellation option on interest rate swaps with a nominal value of £88m for the four years of the new facility.