SIR.L Regulatory News (SIR)

9 September 2015

SECURE INCOME REIT PLC ("SIR" or the "Company")

£587 MILLION NEW CREDIT FACILITIES AND

RELATED PARTY TRANSACTION

The Board of Secure Income REIT Plc, the specialist long term income REIT, announces today new credit facilities replacing some £587 million, representing around two thirds, of its existing debt, and an agreement with its current lender, Bank of Scotland Plc ("BOS"), to reduce swap break costs and other fees relating to its loan facilities.

Following these transactions, the Company has:

· reduced the weighted average cost of debt from 6.8% per annum to 5.7%;

· increased the weighted average term to debt maturity from just under two years to six years; and

· reduced amortisation such that there are no longer any facilities where all surplus cash flow is applied to amortise debt.

As outlined in the Company's preliminary results announcement in March 2015, the Board has been weighing up the advantages to shareholders of replacing the debt that was in place on listing ahead of its scheduled maturity dates in mid-2017 with a longer term debt package. The Board considers that, whilst doing so crystallises certain hedging break costs, the advantages of a lower cost and longer term debt structure, along with the benefits of obtaining finance well ahead of scheduled maturity and while the markets remain relatively strong, are compelling.

The Company has now entered into new non-recourse term loan facilities totalling £587 million secured on two separate portfolios comprising all of the remaining leisure assets and nine of the 20 healthcare assets. The new loans have been advanced by Blackstone Mortgage Trust, Inc. and Rothesay Life in the case of the Company's leisure portfolio, and by Legal & General and a Legal & General client fund in the case of the Company's nine healthcare assets. The interest rate payable on these two facilities amounts to a blended fixed rate of 5.2%, well below the current blended interest cost of 6.8%. The new loans have a weighted average term to maturity of eight years. Together with the existing facilities, the whole of the Group's debt of £885 million has a weighted average term to expiry of six years, compared to just under two years for the original loans and a weighted average cost of debt of 5.7%, reduced from 6.8%.

The Board is continuing to pursue opportunities to refinance the balance of the portfolio and will provide an update in due course. Further details of the new facilities, including loan to value ratios based on the 30 June 2015 valuations once they are available, will be included within the Company's interim results announcement which is expected to be released in late September.

The original loans, which amounted to £1,158 million at the start of the year, were arranged in 2007 with BOS at the time of the original acquisition of the properties owned by the Company. BOS held approximately 86% of that total debt and, through its specialist equity investment arm, was also an equity investor in the original acquisitions. It is BOS's original equity investment which has resulted in its current 23.6% shareholding in the Company. Following an approach by the Company to BOS, an agreement has been concluded such that swap break costs and other fees that would otherwise have crystallised as a result of the accelerated repayment of the Group's loan facilities will be reduced by up to 30% of swap break costs, subject to a maximum of £27.5 million, with amounts saved depending on the amount and timing of any early repayments. This is in recognition of the economic advantages to BOS of early debt repayments.

Following the completion of the sale of Madame Tussauds on 25 August 2015, together with the partial refinancing referred to above, £849 million of the Group's secured loan facilities have recently been repaid. As a result, the first of the conditions to the recent agreement with BOS has been met and swap break costs that would otherwise have amounted to £70.5 million have been reduced by £14.1 million.

Of the original loans, £298.2 million remains outstanding and, should those loans be repaid in full before the end of this year, up to a further £ 13.4 million of cost reduction would be available to the Group. The eventual net break costs incurred will be reported in the results for the year ending 31 December 2015 within the Group's financing costs.

Prestonfield Investments Limited, through three wholly owned subsidiaries and itself an indirect wholly owned subsidiary of BOS, holds 23.6% of the Company's share capital and is therefore a related party (as defined by the AIM Rules for Companies) of the Company by virtue of being a substantial shareholder. Accordingly, the reduction of the swap break costs constitutes a related party transaction under Rule 13 of the AIM Rules. The Directors consider, having consulted with the Company's Nominated Adviser, Stifel Nicolaus Europe Limited, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Eastdil Secured LLC and Morgan Stanley & Co. International plc provided debt advisory services to the Company.

Martin Moore, Chairman of Secure Income REIT Plc, said:

"We are pleased to have concluded these significant steps in the transformation of the business through which we aim to increase profitability, generate attractive growth in shareholder value and ultimately to generate a stable stream of cash distributions once the process is complete."

Enquiries:

About Secure Income REIT

Secure Income REIT floated as a Real Estate Investment Trust on the AIM segment of the London Stock Exchange in June 2014. Upon Admission, the Company had a share price of 174p, representing a market capitalisation of £293 million, which has subsequently grown to in excess of £450 million.

The Company specialises in generating long term, inflation protected, secure income from real estate investments. Its investment strategy is designed to satisfy investors' growing requirements for high quality, safe, inflation protected income flows.

In its audited results for the period ended 31 December 2014 the Company reported gross assets of £1.63 billion and, with a weighted average unexpired lease term of 25 years across its portfolio, all with annual fixed or RPI rental uplifts, has one of the longest income profiles in quoted property sector. Subsequent to this, the Company completed the sale of Madame Tussauds for £332.5 million.

The Company's Board is chaired by Martin Moore and also comprises three further independent Directors in Leslie Ferrar, Jonathan Lane and Ian Marcus, as well as three members of the Prestbury Team in Nick Leslau, Mike Brown and Sandy Gumm.

The Company is externally managed by Prestbury Investments LLP which was also external manager to Max Property Group plc until August 2014, when was sold to Blackstone Group.

General

Morgan Stanley & Co International plc ("Morgan Stanley") is acting exclusively for SIR and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than SIR for providing the protections afforded to clients of Morgan Stanley, or for giving advice in connection with the matter referred to in this announcement or any matter referred to herein. Morgan Stanley, its affiliates and its and their respective directors, officers, employees and agents will not regard any other person as their client nor will they owe or accept any duty, liability or responsibility whatsoever to any person other than SIR for providing advice in connection with this announcement, any statement contained herein or otherwise.