Target Healthcare REIT PLC Increase and refinance of existing debt facilities (5872E)
09 November 2020 - 6:00PM
UK Regulatory
TIDMTHRL
RNS Number : 5872E
Target Healthcare REIT PLC
09 November 2020
9 November 2020
Target Healthcare REIT plc and its subsidiaries
("Target Healthcare" or "the Group")
Increase to, and refinance of, existing debt facilities
The Directors of Target Healthcare, the UK listed specialist
investor in modern, purpose-built care homes (LSE: THRL) are
pleased to announce that the Group has entered into agreements with
each of The Royal Bank of Scotland plc ("RBS") and HSBC UK Bank plc
("HSBC") to extend the terms and increase its existing facilities
with each.
The Group has increased its existing revolving credit facility
with HSBC (the "HSBC RCF") to GBP100 million from GBP80 million.
The HSBC RCF has an initial three-year term to November 2023 with
the option of two one-year extensions thereafter, subject to the
consent of HSBC.
The Group has also increased its existing committed term loan
and revolving credit facility with RBS (the "RBS Facility") to
GBP70 million from GBP50 million. The RBS Facility has a five-year
term to November 2025. The interest cost in relation to the GBP30
million term loan element of this facility has been fully hedged
with an interest rate swap as set out in more detail below.
The revised facilities, when combined with the Group's GBP50
million committed term loan facility with ReAssure which expires in
January 2032, increase the Group's total borrowing capacity to
GBP220 million from GBP180 million.
The extension of these facilities also further improves the
Group's existing debt capital structure by extending the weighted
average term to maturity of the Group's borrowings to 5.5 years
from 3.9 years. Following this announcement, the Group's weighted
average cost on its drawn debt of GBP152 million, inclusive of
amortisation of arrangement costs, is 2.9%.
The amendments address the transition of the facilities with
both HSBC and RBS to SONIA-based loans in advance of the required
transition away from LIBOR which would have been required by the
end of 2021. The Group has closed out the existing hedge in
relation to the term loan element of the RBS Facility, at a cost
consistent with that reflected in the most recently announced
quarterly NAV, and put in place a new SONIA-based interest rate
swap to align with the new term loan under the RBS Facility.
Gordon Bland, Finance Director of Target Fund Managers,
commented: "These revised facilities will continue to provide the
Group with flexible capital to pursue investment opportunities as
they arise while also allowing the Company to manage its capital
structure in line with its investment policy. It remains the
intention that borrowings, over the medium term, should represent
approximately 25 per cent. of the Group's gross assets."
LEI: 213800RXPY9WULUSBC04
ENDS
Enquiries:
Kenneth MacKenzie; Gordon Bland
Target Fund Managers Limited
01786 845 912
Mark Young; Mark Bloomfield
Stifel Nicolaus Europe Limited
020 7710 7600
Dido Laurimore; Claire Turvey; Richard Gotla
FTI Consulting
020 3727 1000
TargetHealthcare@fticonsulting.com
Notes to editors:
UK listed Target Healthcare REIT plc (THRL) is an externally
managed Real Estate Investment Trust which provides shareholders
with an attractive level of income, together with the potential for
capital and income growth, from investing in a diversified
portfolio of modern, purpose-built care homes.
The Group's portfolio at 30 September 2020 comprised 75 assets
let to 27 tenants with a total value of GBP637.5 million.
The Group invests in modern, purpose-built care homes that are
let to high quality tenants who demonstrate strong operational
capabilities and a strong care ethos. The Group builds
collaborative, supportive relationships with each of its tenants as
it believes working in this way helps raise standards of care and
helps its tenants build sustainable businesses. In turn, that helps
the Group deliver stable returns to its investors.
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END
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