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LONDON (Alliance News) - UK Commercial Property Trust Ltd Thursday said it is in "advanced negotiations" with Lloyds Bank PLC about refinancing one of its loans, and said it has already agreed an extension and some changes to its loan with Barclays Bank PLC.
The trust currently has a GBP80 million loan facility with Lloyds Bank, part of Lloyds Banking Group PLC, due to be repaid in June, alongside a seven-year GBP150 million loan facility with Barclays Bank, part of Barclays PLC, which is due to be repaid in May 2018. Both loans have been fully drawn-down.
UK Commercial Property said it is in "advanced negotiations" with Lloyds about refinancing the facility through a 12 year term-loan facility with a new lender, and said it has agreed terms to amend and extend its existing Barclays facility.
The trust is talking to a new lender about the new 12 year loan facility which would be repayable in 2027, and this facility would be the one used to repay the existing Lloyds facility. The trust did not state how much the facility would be, but said it would drawdown GBP100 million to repay the Lloyds facility and use the rest as general working capital.
The total interest rate on the new 12 year facility is expected to be in the range of 3.31% to 3.51% per year, and UK Commercial Property said the new facility is expected to contain covenants, warranties and undertakings, which are customary for a term loan facility of this nature.
With Barclays, the trust has agreed to extend its existing facility until 2020, and the provision of an additional five-year revolving credit facility of up to GBP50 million. The trust said it has agreed the heads of terms with Barclays and expects to finalise the amendments and extension in due course.
The extended and new Barclays facilities are expected to carry an interest rate of around 1.5% over LIBOR, which the trust said is a reduction of 0.2% from its existing facility. The new facility will also contain covenants, warranties and undertakings which are the same as or substantially similar to the existing facility, it said.
The facilities provided by Barclays will be used for general purposes, but UK Commercial Property said it could be utilised to fund acquisitions of assets, and provides flexibility to the trust's debt structure.
UK Commercial Property shares were down 0.3% to 91.25 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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