Hammerson increases headroom to most sensitive covenant

(Sharecast News) - Hammerson said it was continuing to focus on reinforcing its balance sheet on Wednesday, announcing that it has increased the headroom to its most sensitive covenant, and improved its liquidity position.

It said that would enable it to focus on the continued delivery of its strategy.

The FTSE 250 shopping centre operator said it had negotiated an amendment to the covenants on its existing private placement notes, which increased the headroom available on the unencumbered asset ratio covenant until 31 December.

It explained that it also received approval for the issue of up to £300m under the Covid Corporate Financing Facility (CCFF), increasing its maximum liquidity to £1.5bn.

To further enhance cash reserves, an additional £300m was drawn on its revolving credit facilities.

As at 29 June, Hammerson said it had collected 73% of first half rent in the UK, 53% in France and 72% in Ireland.

As at the same date, it had collected 16% of third quarter rent in the UK, while it remained too early to comment on France and Ireland.

The company said it was confident that collection rates would continue to improve materially in all regions, as agreements were progressed with brands.

"Covid-19 has had an unprecedented impact on many businesses," Hammerson said in its statement.

"Following the closure of our flagships, except for essential retail, we have supported our occupiers, particularly smaller and independent brands that are less resilient to the temporary closures.

"All discussions with brands regarding rent deferrals, monthly payments, and waivers have been on a case-by-case basis, taking into account the business model, risk profile and ability of the occupier to pay, alongside the support made available by the relevant governments."

At 1000 BST, shares in Hammerson were up 2.91% at 82.6p.