11 Sep 2018 17:42
For immediate release
11 September 2018
MedicX Fund Limited
("MedicX", the "Fund" or the "Company")
£264.5 million refinancing of Aviva Investors debt facilities
MedicX, the specialist primary care infrastructure investor in modern purpose-built primary healthcare properties in the United Kingdom and Republic of Ireland, is delighted to announce that it has successfully refinanced £233.7 million of existing Aviva loan facilities, as well as increasing the loan facility by a further £30.8 million.
MedicX benefits from resetting the Loan to Value ("LTV") covenant on the legacy restructured debt portfolio to 65%, thereby enabling the release of c.£72 million of charged property collateral, c.£47 million of which has been applied to increase the loan facility. The remaining c.£25 million includes eight selected properties that have been released from charge, providing flexibility to undertake asset management projects identified at those locations as well as increasing unencumbered collateral to negotiate future facilities at current market rates. Lastly, the refinancing enables MedicX to take the opportunity to rationalise part of its group structure which will see improved efficiency through the elimination of six non-trading subsidiaries which no longer own investment property.
The refinancing, which was conducted without incurring break fees on the refinanced loan facilities, combined forty six tranches across twenty legacy loan agreements, into two tranches under one new loan agreement.
The new loan facility consists of a new £30.8 million 10 year interest only tranche with a fixed interest rate of 3.05% per annum, together with a £233.7 million 15 year partially amortising tranche with a fixed interest rate of 4.69% per annum (equal to the blended current cost of the existing facilities). Amortisation of £40 million will be spread over the 15 year term of the £233.7 million tranche, with the remaining £193.7 million repayable at maturity.
The new facility agreement standardises the covenants that will apply to the new facility. These will require the Group to operate with a debt service cover ratio of at least 140% throughout and with an LTV of no more than 75% for the first five years, falling to 70% for years six to ten and then 65% for the remaining term. The facilities will be fully drawn immediately, with the net proceeds from the new £30.8 million tranche used in the first instance to repay the £20 million drawn RBS Revolving Credit Facility ("RCF"), with the excess held as cash until deployed into investment properties either under construction or forming part of the Company's acquisition pipeline.
Following the refinancing, the Group's adjusted gearing (the ratio of total debt to total assets, in each case net of cash) will increase marginally to 53.3% (June 2018: 52.5%) and the weighted average unexpired term of debt will increase from 11.0 to 11.7 years. The Group's weighted average cost of debt remains almost unchanged at 4.26%, from 4.25% at 30 June 2018.
Helen Mahy, Chairman, said "We are delighted to have agreed a refinancing with our long-term funding partner Aviva Investors. The new arrangements will improve operational efficiency and free up property collateral, enabling MedicX to undertake identified asset management projects and negotiate new facilities at competitive rates which should reduce MedicX's average cost of debt".
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For further information please contact:
Octopus Healthcare Adviser Limited +44 (0) 345 0404 5555
Octopus Healthcare Group +44 (0) 20 3142 4820
Mike Adams, Executive Chairman
Canaccord Genuity +44 (0) 20 7523 8000
Andrew Zychowski/Helen Goldsmith
Liberum +44 (0) 20 3100 2000
Richard Crawley/Jamie Richards
Buchanan +44 (0) 20 7466 5000
Charles Ryland/Henry Wilson
Information on MedicX Fund Limited
MedicX Fund Limited ("MedicX", the "Fund" or the "Company", or together with its subsidiaries, the "Group") is the specialist primary care infrastructure investor in modern, purpose-built primary healthcare properties in the United Kingdom, listed on the London Stock Exchange, with a portfolio comprising 166 properties.
The Investment Adviser to the Company is Octopus Healthcare Adviser Ltd, which is part of the Octopus Healthcare group. Octopus Healthcare invests in and develops properties as well as creating partnerships to deliver innovative healthcare buildings to improve the health, wealth and wellbeing of the UK. It currently manages over £1.4 billion of healthcare investments across a number of platforms, with a focus on five core areas: GP surgeries, care homes, special education schools, retirement housing and private hospitals. Octopus Healthcare is part of the Octopus group, a fast-growing UK fund management business with leading positions in several specialist sectors including healthcare property, energy, property finance and smaller company investing. Octopus manages £8.0 billion of funds for more than 50,000 retail and institutional investors, as well as supplying energy to more than 220,000 customers.
Octopus Healthcare Adviser Ltd is authorised and regulated by the Financial Conduct Authority.
The Company's website address is www.medicxfund.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website), nor the contents of any website accessible from hyperlinks within this announcement, are incorporated into, or forms part of, this announcement.
The Company's Legal Entity Identifier is 2138008POF35FTNFCB25.