The all-in cost of the new borrowing, which is at 60% loan-to-value, is fixed at 5.05% for the duration of the loan. The loan will amortise to £109 million, 55% loan-to value, by 2022.
Together with headroom in other existing facilities, the new loan provides capacity to pay down the Group’s remaining facilities that mature in 2013, extending its next refinancing event until May 2014. Following the refinancing, the Group's weighted average debt maturity increases to 3.5 years.
-- Advertisement --
The transaction reduces the Group's see through cost of debt by 10 basis points from 5.7% at 31 December 2011 to 5.6%, generating proforma annual savings of approximately £0.6 million. These savings will offset the swap break costs amounting to £4.7 million (3 pence per share) that have been incurred as part of the transaction and will be recognised in the first half of 2012. Following the transaction the proportion of the Group’s debt that is hedged has increased from 69% at 31 December 2011 to 80%.
The debt facility represents Legal & General’s first real estate debt financing deal and has been arranged by LGIM (Legal & General Investment Management)Commercial Lending Ltd (CLL), which was established in May 2011 and which also acts as facility agents.
The new loan forms part of UNITE's strategy to introduce new lenders to the Group, particularly from non-bank sources, and brings the total amount of new debt raised in 2012 to over £200 million.
Joe Lister, Chief Financial Officer for the UNITE Group, said: "Securing this new, long term facility with a lender of Legal and General’s quality, is further testament to the strength of UNITE's business and marks an important step for the Group. We have now arranged over £400 million of new debt facilities for UNITE and its funds in the last 12 months."
(CD/GK)
