With more attention turning to the financing needs of real estate investors, it is interesting to note details from borrowers when announced.
Publicly-listed Impact Healthcare REIT, which concentrates on UK care homes, provides one such example.
On Wednesday, the group said it had agreed to extend a revolving credit facility with HSBC bank by £25 mln (€29 mln) on the same terms as the existing one, taking it to a £75 mln worth of financing overall with the bank.
At the same time, the company has cancelled a £15 mln revolving facility with Metro Bank, which from the statement given appears to have been more expensive.
The HSBC facility was secured using assets released from the Metro security pool.
Overall, the new arrangement increases the company’s ‘headroom’ by £10 mln, provides available debt with improved covenants, and at a margin of 200 bps, which is 65 bps lower than the Metro facility.
This reduces the group’s exposure to expiring debt within the next 12 months to £15 mln, being the remainder of the Metro loan which can be repaid from available headroom across the firm’s remaining revolving facilities. The HSBC facility has a term until April 2025.
