Life Science REIT agrees to £150m debt financing facility


life sciences REITs agreed a £150 million debt financing facility with HSBC UK, it announced on Wednesday, consisting of a three-year £75 million term loan and a revolving credit facility of same size.

The AIM-listed real estate investment trust said it was its first credit facility.

He said the facility had an interest rate on amounts drawn of 225 basis points compared to SONIA – currently equivalent to a total cost of 2.9%.

The facility was currently unused, but would give the company additional financial resources to execute its strategy of acquiring life science properties in the “Golden Triangle” of Oxford, Cambridge and London .

Life Science said the credit facility was secured on properties already acquired since its IPO, with normal market covenants on loan-to-value and interest coverage.

The debt structure would allow the company to flexibly add new properties to the security pool to achieve its optimal leverage target, as new assets are acquired.

“The company takes a conservative approach to leverage and is targeting an LTV ratio of 30% to 40% over the longer term,” said Simon Farnsworth, managing director of Life Science investment manager Ironstone Asset Management.

“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.”

At 08:59 BST, shares of Life Science REIT were down 0.25% at 100.75p.

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