Schroder Real Estate Investment Trust Limited announces that it has now completed a new £129.58 million (approx. €150 million) loan facility with Canada Life to refinance its £114.5 million (approx. €133 million) securitized loan in full.
Refinancing the securitized loan that matured in July 2014 has been a major strategic objective for the Company and the new facility satisfies the key criteria of achieving a long-term debt maturity, a reduction in the cost of debt and sufficient operational flexibility to permit continued active management of the portfolio.
As a condition of the refinancing the Company has broken its remaining interest rate swaps related to the securitized loan. This has crystallized a total swap break cost of £15.1 million which compared to the negative mark to market value in the Company's last reported Net Asset Value ('NAV') as at December 31, 2012 of £19.1 million. As the Canada Life loan benefits from a fixed rate there will no requirement for the Company to reflect a mark to market value of interest rate swaps in its NAV.
Having paid swap break costs and total re-finance fees estimated at £2.1 million, including an arrangement fee of approximately £1 million, the Company has cash outside Canada Life's security of £27.5 million. This results in a net loan to value, assuming the portfolio valuation as at January 15, 2013, of approximately 39%.
The successful refinancing of the loan will allow the Board, in turn, to consider the longer term sustainability of the dividend. The terms of the new loan will be taken into account alongside other factors, including the recent planning refusal at Reynards Trading Estate in Brentford. The Board will update shareholders in due course.
Source: Schroder Real Estate Investment Trust
