Life Science REIT, a growing life science-only real estate business in the UK sector, entered into a £150 million debt financing facility with HSBC UK Bank.
The facility, which is the company’s first, comprises a three-year £75 million term loan facility and a revolving credit facility of the same size.
It has an interest rate on amounts drawn of 225 basis points over SONIA, which currently equates to a total cost of 2.9 percent.
Although the facility is not currently drawn, it will give the company additional financial resources as it pursues its strategy of acquiring life sciences properties in Oxford, Cambridge and London.
The facility is secured on properties already acquired by the company since its IPO, with normal market covenants on loan to value and interest coverage.
The debt structure allows Life Science REIT to add new properties to the security pool to achieve its optimal leverage target as it acquires new assets.
Simon Farnsworth, managing director of Ironstone Asset Management, the firm’s investment adviser, said: “The firm takes a conservative approach to leverage and is targeting an LTV ratio of 30% to 40% over the longer term.
“The credit facility announced today provides us with the flexibility to improve the effectiveness of our balance sheet as we continue to make significant progress on a number of acquisition opportunities while strengthening our financial resources.”