Palace Capital Share News (PCA)

LONDON (Alliance News) - Property investor Palace Capital PLC said Wednesday it has entered extra hedging facilities worth GBP55.8 million to mitigate future interest risk.

Palace Capital has now made swaps for around 70% of its drawn debt facilities, worth around GBP70.3 million, due to the anticipated rise in UK interest rates in the short to medium term.

As a result of fixing the interest rates on most of its debt facilities, the average cost of debt going forward has risen to 3.4% from 2.9%.

Finance Director Stephen Silvester said: "We have had one of the consistently lowest costs of debt in the sector in recent years."

"Given the advice from Rathbone and market expectations concerning interest rates, we agreed that locking-in the majority of our debt on fixed rates provides the company with limited exposure to future interest rate risk whilst maintaining our relative cost of funds position and good headroom with regards to interest cover."

Shares were up 0.9% on Wednesday at 328.00 pence each.