Empiric Student Property secures £40m debt extension

14th Dec 2016 12:26

(ShareCast News) - Student accommodation owner and operator Empiric Student Property announced the agreement of a new £40m extension facility to its existing £80m fixed rate term loan facility arranged by Barings Real Estate Advisers, a member of the MassMutual Financial Group, on Wednesday.The company said the amended and restated facility was now secured against a portfolio of 25 operating assets, held as a lending group through a wholly owned subsidiary, Empiric Investments Four.It said the new £40m facility was expected to be drawn down in full on 16 December, and is repayable in April 2028.The new facility has a fixed all in rate of 3.64% interest only throughout the term.That rate was fixed up to a loan to value ratio of 55%, providing a fixed all-in blended rate of 3.37% for the amended and restated Facility.The amounts drawn down under the facility will be segregated and non-recourse to the company, and will be used to fund further investments in both operating assets and forward funded projects.Following drawdown of the new facility, the estimated loan to value ratio for the company will be approximately 30.5%, compared to 22.7% on 30 June.In accordance with the its investment policy, Empiric said it will maintain a conservative level of aggregate borrowings, targeting 35% and no more than 40% of the gross asset value of the company, calculated at the time of drawdown."This extended long term facility helps the group to maintain our low overall cost of borrowing and further extend our average unexpired loan term," said chief executive Paul Hadaway."The amended and restated facility also provides further debt resource to help support our growth plans and business model."We are pleased to have built on and extended our excellent working relationship with Barings, one of the largest global real estate investment managers and debt providers."