MirLand, one of Russia's leading residential and commercial property developers, is pleased to announce that it has refinanced two loan facilities totaling approximately US $43.1 million (approx. 31.3 million).
These refinancings, undertaken by two of Russia's leading banks, are in line with the Company's strategy of actively managing its funding sources to finance existing and future development activities. They follow the sale since the beginning of 2011 of series D bonds on the Tel-Aviv Stock Exchange which raised an additional US $10 million.
The two loans are:
- The extension of and revisions to an existing loan facility with GazpromBank on the Vernissage Mall in Yaroslavl. This property is owned by a jointly controlled entity, in which Mirland holds a 49% ownership interest however being the largest shareholder. The renewed loan amount is US $29.1 million, representing the remaining balance of the previous loan following scheduled amortization. The new interest rate is 9.25% p.a. (previously 12% p.a.) and the loan has been renewed for a five-year term, with the option of a two-year extension. The principal will be repaid through equal quarterly payments and a balloon repayment of approximately 53% at the end of the term.
- The refinancing by Sberbank, Russia's largest bank, of an office building in Moscow, forming part of the Century Project. The Century Project comprises two office buildings of approximately 12,000 m². Each asset is owned by one of Mirland's 51% held subsidiaries. The loan amount relating to this asset is US $14.0 million, and is repayable at an interest rate of 7.7% above three-month LIBOR over a term of seven years. The principal will be repaid through quarterly payments and a balloon payment of approximately 37% at the end of the term. The proceeds from the subject loan will be used to repay most of Mirland's outstanding shareholder loan with regard to that building.
Commenting, Nigel Wright, Chairman, said: "We are delighted to have procured these new loan facilities amidst early signs of recovery and improvement in the domestic funding markets in Russia following a challenging period in world and domestic financial markets.
"We continue our strategy of securing diversified funding from a range of potential providers in the banking and capital markets so that we may fully exploit both existing and future development and investment opportunities for the benefit of all our shareholders."