Share this article:
JSE REIT Stor-Age, a self-storage property fund, said yesterday it had finalized a UK debt restructuring process with better access to credit.
Managing Director Gavin Lucas said: “One of the main drivers of the debt restructuring process has been to improve financing conditions to allow greater flexibility in the use of the facility.
“We also remained focused on diversifying sources of funding, with the current exposure to a single bank shifting to two clearing banks and one institutional lender, reducing concentration risk and dependency.”
Stor-Age’s UK operations, marketed under the Storage King brand, have to date been backed by a £ 52 million (R 1 billion) revolving credit facility (RCF) from Lloyds Bank.
Lloyds RCF has been refinanced and replaced with the introduction of a “club” facility. HSBC UK Bank Plc and Santander UK Plc have been selected as the two banks to participate in the club facility, while an institutional lender, Aviva Investors, has also been brought into the larger structure to provide longer term funding. .
This resulted in an increase in lending capacity to support future growth, increasing the existing facility from £ 52million to £ 96million, including a £ 25million accordion option.
The price was better, reducing the existing facility from 2.75% over Libor to a blended rate of 2.5% over Sonia in the club’s bank facility and an overall fixed rate of 3.21% in the institutional facility.
Following the debt restructuring, the new combined facilities will also have a weighted average maturity of 5.5 years, Stor-Age said.