Hercules trust secures EUR 400m loan from Aareal

Specialist retail warehouse fund Hercules Unit Trust (HUT) has signed a £350 mln (EUR 400 mln) five-year loan facility underwritten by Aareal Bank.

HUT is advised and 38.6%-owned by British Land.

An initial £250 mln term loan will be used to repay half of the £500 mln outstanding under the existing credit facility that expires in October 2012. The interest rate on this term loan has been swapped to a fixed rate, resulting in an all-in rate of 4% per annum including margin and arrangement fees, compared to 5.25% payable under the existing facility.

A further £100 mln revolving loan facility will be used for acquisitions, disposals and further general business purposes.

HUT said this revolving facility will enable the fund to serve a redemption notice on the £194 mln 10% subordinated convertible notes to meet the earliest redemption date in January 2012.

Aareal has underwritten the provision of the entire facility and the interest rate hedge and act as Arranger, Agent and Security Trustee.

HUT is a specialist retail warehouse fund managed by Schroders and advised by British Land. It was created in September 2000 as a closed ended Jersey property unit trust to invest in retail warehouses and shopping parks throughout the UK. It is the country's largest specialist retail warehouse property unit trust with a property portfolio of £1.6 bn comprising 21 retail and shopping parks.