Stockholm-listed property company Kungsleden has cut its cost of debt by securing a new SEK 3.8 bn (€400 mln) credit facility.
Stockholm-listed property company Kungsleden has cut its cost of debt by securing a new SEK 3.8 bn (€400 mln) credit facility.
The lenders in the credit facility are Nordea AB and Skandinaviska Enskilda Banken with Skandinaviska Enskilda Banken acting as facility and security agent.
The new loan has a duration of five years and an average loan-to-value ratio of 60%. Part of an on-going credit agreement, the new loan replaces a previous facility which had a higher interest margin and a maturity date in March 2016.
The facility helps refinance Kungsleden's €216 mln acquisition of office blocks in Stockholm’s Kista Science City from Areim Fund I in December 2014.
The newly acquired properties in Kista were initially financed with company's own funds. As the new credit facility helps to normalise the loan-to-value ratio in the existing portfolio, Kungsleden will now have a purchase capacity by SEK 3.5 bn. The average duration of the loan portfolio will increase due to the new credit facility with 0.9 years and assumes as of 31 May amount to 3.3 years.
'With this new credit facility Kungsleden achieves long-term financing of the Kista acquisitions and at the same time obtains an early refinancing of its existing credit facility,' said Anders Kvist,CFO at Kungsleden.
'Consistent with our long-term plan, we increase the duration of our borrowing, reduce the financial risk and cut the average cost of borrowing significantly. Our average borrowing cost drops from 5.1 to about 4.4% and the group’s loan-to-value ratio is expected to amount to 57% as of May when the new credit agreement will be utilised.'
