LONDON (Alliance News) - Ediston Property Investment Company PLC Thursday said that its EPIC (No.1) Ltd subsidiary has entered into a 10-year, GBP40 million secured term loan agreement with Aviva Commercial Finance Ltd, enough to fund the remainder of its current acquisition pipeline and leave a small amount of cash left over.
The property investor said the loan has been fixed at an interest rate of 3.09% for the period of the loan as long as the loan-to-value ratio is maintained below 40%. It is secured over the company's existing property portfolio including the property in Bath that it bought earlier this month.
Ediston said that once the facility is drawn down and deployed, its gearing will be about 29% of gross assets, in line with its stated target level of 30% of gross assets.
"Putting in place this debt facility and providing the means to expand the portfolio was a key part of the strategy we stated at the time the company was floated. The board considered several financing options but considered a long-term partnership with Aviva was the most attractive together with the ability to fix the interest for ten years at a rate accretive to the company's dividend," Chairman William Hill said in a statement.
"On completion of the pending acquisitions the board will be turning its attention to the next phase of the company's strategy by looking at the opportunities to grow its equity base," he added.
The company had said in February that it expected to make a number of new investments on completion of a debt facility. It said its strategy would then be to ensure its dividend is maintained but with assets "that can be enhanced over time and benefit from the expected improvement in the leasing markets".
Earlier this month, it bought an office property in Bath from a private investor for GBP4.4 million.
Ediston Property shares were up 0.4% at 109.19 pence Thursday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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