Derwent London has signed a new £550 mln (€660 mln) unsecured five-year revolving credit facility from HSBC, RBS, Barclays and Lloyds, with HSBC acting as agent.
Derwent London has signed a new £550 mln (€660 mln) unsecured five-year revolving credit facility from HSBC, RBS, Barclays and Lloyds, with HSBC acting as agent.
The financing replaces £650 mln of secured bank facilities expiring between April 2014 and January 2017, and follows on from the group's issue in July of £150 mln of convertible bonds due in July 2019.
The margin payable under the new facility is 160 basis points over Libor for net asset gearing levels of up to 50%. The margin increases at higher levels of gearing with a maximum permitted level of 160%. The current level of the group's net asset gearing is 40.4% based on June 2013 property values.
'We are pleased to have put these new arrangements in place at competitive pricing,' said Damian Wisniewski, finance director of Derwent London. 'Our new unsecured bank facility brings greater operational flexibility in relation to individual properties and the release of security on the facilities repaid provides the Group with a pool of unencumbered assets of over £1.8 bn.'
Derwent London owns a portfolio of commercial real estate predominantly in central London valued at £3.1 bn at end-June 2013.
International law firm Pinsent Masons advised the banks on the revolving facility for FTSE 250 property investment company. The Pinsent Masons team advising on the deal was led by banking partner William Oliver, assisted by Liam Terry and Anthony Frost. Slaughter and May acted for Derwent London.
Commenting on the deal William Oliver said: 'We have seen a noticeable increase in transactions over the past three to six months, culminating in a peak period over the summer where we closed deals worth over £1.2 bn in the space of a fortnight. We have an encouraging pipeline in place and are hopeful that this is a positive sign of things to come.'
