alstria has signed a credit agreement for the refinancing of its syndicated loan amounting to €544 million, replacing the previous facility, which was due to mature as of July 20, 2015.
The early refinancing allows alstria to benefit from the attractive financing environment and significantly improves the overall debt maturity profile of the Company. Including the convertible bond issued in June 2013 alstria’s average debt maturity more than doubles from 2.5 years to 5.6 years. The new loan was arranged by UniCredit Bank AG and underwritten by UniCredit Bank AG, Berlin-Hannoversche Hypothekenbank AG, HSH Nordbank AG and Helaba Landesbank Hessen-Thüringen.
Taking alstria’s long-term lease profile into account (WAULT: 6.7 years), the new credit facility significantly improves the visibility of alstria’s cash flow for the next years. With the new syndicated loan in place alstria has no major refinancing needs before mid-2018.
The successful refinancing will reduce alstria’s cost of debt on its main credit facility starting mid-2015 to approximately 3.7% from 4.3% today. The existing hedges (EURIBOR swap @2.99%, maturity mid-2015) will not be terminated and therefore the full benefit of the lower interest rate will kick in by mid-2015.
In order to maintain the flexibility needed to allow for proper capital recycling, around 30% of the new loan will remain floating, while 70% of the exposure will be fixed. Based on alstria’s current financial structure the total costs of debt on the corporate level (based on the current swap curve) will drop to approximately 3.4% from mid-2015. The Company intends to use any additional profits from reduced financing costs to further reduce its leverage. For the financial year 2014 the average cost of debt on the corporate level is expected to be at around 3.6%.
“With an average of 5.6 years our debt maturity is in line with our average lease length and therefore provides one of the most reliable cash flow profiles in the European real estate scene”, says Olivier Elamine, CEO of alstria office REIT-AG.
“The early and long-term refinancing proves the trust of alstria’s banking partners into the quality of the business model and it allows the Company to focus on growth opportunities going forward”.