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28 Jan 2009 14:29
Standard Life Investments Property Income Trust Limited
28 January 2009
Cash position
Further to the recent net asset value statement issued by the Company, the Board has set out below further details of the Company's cash position and borrowings.
As at 31 December 2008 the Company had cash of £44.5 million and borrowings of £84.4 million. The interest on £72 million of the borrowings has been fixed through an interest rate swap at an all in rate of 5.615 per cent. per annum. The interest on the remaining borrowings of £12.4 million is not fixed and is currently 2.75 per cent. per annum.
The loan to value covenant under the bank facility is 55 per cent. The value as at 31 December 2008 of the secured assets (the property portfolio and part of the Company's cash reserves) was £153.6 million. The Company has the right to add further cash to the secured assets or to prepay any part of the facility.
By way of illustration only, if the Company repaid £12.4 million of the bank facility, being the amount of borrowings where the interest rate is not fixed, and the remaining cash is included in the secured assets, the loan to value would be 46.5 per cent. and the value of the current valuation of the property portfolio would need to fall by more than 19.6 per cent. to reach the covenant level. If the Company used all of its cash reserves to repay part of the borrowings, including crystallising the relevant proportion of the interest rate swap liability, the loan to value would be 35.0 per cent. and the value of the current valuation of the property portfolio would need to fall by more than 36.3 per cent. to reach the covenant level.
The current interest cover is 2.1 times and the interest cover covenant is 1.7 times. Accordingly, the net rental income of the Company would need to fall by 19.4 per cent. to reach this covenant level.
The Company is therefore well within its banking covenants and the Company's significant cash reserve gives it considerable flexibility in managing its working capital and future investment opportunities.
Enquiries:
Jason Baggaley Gordon Humphries Standard Life Investments 0131 245 2833
Nigel Russell Graeme Caton Graham Reaves G&N 0131 226 4411
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