Listed UK regeneration specialist St Modwen Properties has obtained a £475 mln (€538 mln) unsecured revolving credit facility.
The loan replaces £488 mln of current bilateral secured debt facilities.
St. Modwen said that the refinancing provides a reduced cost of debt and improved operational flexibility. The facility has an initial maturity of five years which can be extended to a maximum of seven years, subject to lender consent.
'The successful transition to an unsecured debt structure will provide us with a greater level of financial and operational flexibility to implement our intended business plan at a lower overall cost of finance,' said Rob Hudson, chief financial officer of St. Modwen.
The syndicate of lenders for the new facility consists of the company’s existing banking group, being Barclays Bank, HSBC Bank, National Westminster Bank and Santander UK, in addition to the introduction of AIB Group.
As part of the transaction, the company has cancelled interest rate swaps at a cash cost of £6 mln on completion which will result in initial annual savings of £2.5 mln.
Based on the group's net debt of £440 mln, the transaction will reduce St Mowden's cost of debt by 50 basis points from 4.2% to 3.7%. The company's debt maturity will increase from 2.7 years to 4.1 years.
