UK REIT British Land has signed a new £485 mln (€663 mln) credit facility with a syndicate of seven banks to refinance two existing loans which were due to mature in 2016 and 2018.

UK REIT British Land has signed a new £485 mln (€663 mln) credit facility with a syndicate of seven banks to refinance two existing loans which were due to mature in 2016 and 2018.

The unsecured revolving facility has a maturity of five years which may be extended to a maximum of seven years, the company said. It replaces a £560 mln loan which would have matured in May 2016 and is an extension and repricing of a £310 mln facility which was due to expire in May 2018.

The new loan has an initial margin of 90 basis points, 25 basis points lower than the facilities agreed by the group last year.

'This re-arrangement cancels £400 mln of facilities. The margin is below that on both previous facilities and holding costs are significantly reduced, lowering our overall financing costs,' British Land said in a statement.

The bank consortium includes the Royal Bank of Scotland, Santander, Bank of Tokyo-Mitsubishi UFJ, Barclays Bank, Bank of China, Crédit Agricole Corporate and Investment Bank, and Handelsbanken.

RBS acted as documentation and facility agent. RBS, Santander, Bank of Tokyo-Mitsubishi UFJ and Barclays Bank were appointed as joint co-ordinators and bookrunners, and were mandated lead arrangers. Commitments were also provided by Bank of China and Crédit Agricole Corporate and Investment Bank, also as mandated lead arrangers, and by Handelsbanken as lead arranger.

'We actively manage our debt portfolio to ensure that our finance is competitively priced and appropriate for our strategy,' commented Lucinda Bell, CFO of British Land. 'This facility extends the term of our strong and well diversified portfolio, whilst the £400 mln cancellation reduces cost and is consistent with our policy of maintaining flexibility and not gearing up on yield shift.'