26 September 2019

 

 

Custodian REIT plc

 

("Custodian REIT" or "the Company")

 

Extension of Revolving Credit Facility

 

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the extension of its revolving credit facility ("RCF").

 

On 25 February 2014, the Company agreed a RCF of £25 million with Lloyds Bank Commercial Banking ("Lloyds Bank") for a term of five years, and on 13 November 2015, the total funds available under the RCF were increased from £25 million to £35 million with the termination date extended to 13 November 2020.  The RCF is secured by way of a first charge over a discrete portfolio of properties, requiring a maximum loan to value ("LTV") ratio of 50% on those properties specifically charged to it, and interest cover of at least 250%.  Under the terms of the agreement the Company pays annual interest of 2.45% above three-month LIBOR on outstanding amounts drawn from time to time.

 

On 17 September 2019 the Company and Lloyds Bank agreed to increase the total funds available under the RCF from £35 million to £50 million for a term of three years, with an option to extend the term by a further two years subject to Lloyds Bank's agreement, and a reduction in the rate of annual interest to between 1.5% and 1.8% above three-month LIBOR, determined by reference to the prevailing LTV ratio.

 

The RCF includes an 'accordion' option with the facility limit initially set at £46 million, which can be increased to £50 million subject to Lloyds Bank's agreement.

 

Commenting on the extension of the RCF, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:

 

"Since IPO, the RCF has been crucial in providing flexibility to facilitate the Company's growth while minimising cash drag from equity issuance and opportunistic property disposals to maintain a fully covered dividend.  We are delighted to have increased the RCF to £50 million and secured it for at least three more years at a lower interest margin, which should reduce net finance costs, provide additional capacity to exploit acquisition opportunities and maintain the flexibility to minimise cash drag."

 

 

Richard Round, Relationship Director for Real Estate & Housing in the Midlands at Lloyds Bank, said:

 

"Custodian REIT has gone from strength to strength since its IPO in 2014 and we are pleased to have supported it throughout its journey.  From loans in 2015, the first long-term financing agreement through our partnership with Scottish Widows, and 2016 to, most recently, extending its RCF.

 

"This deal will ensure Custodian REIT can expand its property portfolio to drive further growth.  We look forward to seeing the business prosper in the coming years and supporting it every step of the way."

 

-Ends-

 

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Notes to Editors

 

Custodian REIT plc is a UK real estate investment trust with a portfolio comprising properties predominantly let to institutional grade tenants throughout the UK, principally characterised by properties with individual values of less than £10 million at acquisition.

 

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By principally targeting sub £10 million lot size regional properties, the Company intends to provide investors with an attractive level of income and the potential for capital growth, becoming the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate.

 

Custodian Capital Limited is the discretionary investment manager of the Company.

 

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