RBS refinances Standard Life property fund

Royal Bank of Scotland (RBS) has refinanced Standard Life Investments Property Holdings with a £145 million loan.

RBS is the existing lender to the fund, which is a subsidiary of Standard Life Investments Property Income Trust. The new loan extends the majority of an existing £155 million debt facility.

The new loan consists of a £110 million seven-year term loan and a £35 million five-year revolving credit facility, which can be extended by one or two years. The whole £145 million has been drawn down by Standard Life Investments Property Holdings and its loan-to-value currently stands at 29.5 percent. The interest cover for the group is now around 780 percent.

The term loan has been priced at 1.375 percent over three-month LIBOR, while RCF is priced at LIBOR plus 1.2 percent. The pricing equates to an all-in rate of 2.725 percent on the term loan, including an interest rate swap provided by RBS, and 1.78 percent on the RCF, based on LIBOR of 0.58 percent as at 27 April 2016.

The blended rate therefore stands at 2.5 percent, based on the RCF being fully drawn.

The facility has a maximum LTV of 60 percent for the first five years and 55 percent thereafter. The interest cover ratio is not less than 175 percent for the term of the facility.

The loan is secured over the group’s existing property portfolio and properties can be substituted into the security pool.

Standard Life said that the RCF will allow aggregate debt to be increased or decreased depending on the investment manager’s view of the property market and ongoing cash levels within the group.