Palace Capital PLC Hedging Strategy Update (9014G)
07 March 2018 - 6:00PM
UK Regulatory
TIDMPCA
RNS Number : 9014G
Palace Capital PLC
07 March 2018
Palace Capital PLC
("Palace Capital", the "Company" or the "Group")
Hedging Strategy Update
Palace Capital plc, the property investment company that focuses
on commercial property predominantly outside London, announces that
it has entered into further hedging facilities totalling GBP55.8
million in order to mitigate future interest rate risk.
The Company has now executed swaps for approximately 70 per
cent. of Group drawn debt facilities, equating to GBP70.3 million,
due to the recent increase in expectations that UK interest rates
will rise in the short to medium term. The Board concluded that it
was prudent to fix the interest rates on the majority of its debt
facilities in order to give the Company protection against higher
rates and limit its exposure to movements in LIBOR. As a result,
the Group's average cost of debt, going forward, has increased from
2.9 per cent. to 3.4 per cent.
JC Rathbone Associates Limited ("Rathbone") provided hedging
advice to the Board. The hedging that has been entered into
requires a fair value assessment at each of the Company's future
reporting dates and Rathbone will provide this to the Group.
Stephen Silvester, Finance Director, commented: "We have had one
of the consistently lowest costs of debt in the sector in recent
years. Given the advice from Rathbone and market expectations
concerning interest rates, we agreed that locking-in the majority
of our debt on fixed rates provides the Company with limited
exposure to future interest rate risk whilst maintaining our
relative cost of funds position and good headroom with regards to
interest cover."
In relation to the proposed admission of the Company's shares to
the premium listing segment of the Official List of the FCA and
admission to trading on its Main Market for listed securities, a
supplementary Prospectus will be published as soon as practicable
and made available on the Company's website at
www.palacecapitalplc.com.
Date: 7 March 2018
For further information, contact:
Palace Capital plc
Neil Sinclair, Chief Executive
Stephen Silvester, Finance Director
Tel. +44 (0)20 3301 8331
Allenby Capital Limited (Nominated Adviser and Joint Broker)
Nick Naylor / James Reeve / Asha Chotai
Tel. +44 (0)20 3328 5656
Arden Partners plc (Joint Broker)
Chris Hardie / Ciaran Walsh
Tel. +44 (0)207 614 5917
Capital Access Group (Financial PR)
Scott Fulton
Tel. +44 (0)20 3763 3400
About Palace Capital plc (www.palacecapitalplc.com):
Palace Capital is a UK property investment company admitted to
trading on the AIM Market of the London Stock Exchange (LSE: PCA).
The Company is not sector specific and looks for opportunities
where it can enhance the long-term income and capital value through
asset management and strategic capital development in locations
outside London. In its last reported financial year, Palace Capital
produced a 20.0% increase in adjusted profit before tax, a 7.0%
uplift in EPRA NAV per share and a 16.0% increase in dividends.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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