Target Healthc. Regulatory News (THRL)

30 November 2021

Target Healthcare REIT plc and its subsidiaries

("Target Healthcare" or "the Group")

New long-term institutional debt facility

Target Healthcare REIT plc, the UK listed specialist investor in modern, purpose-built care homes, announces that it has entered into a new long-term £37 million committed term loan facility (the "Facility") with Phoenix Group ("Phoenix"), an existing lending partner. The Facility carries an aggregate fixed rate of interest of 3.13% per annum on a 10-year term, maturing in January 2032, aligned with the Group's existing £50 million facility with Phoenix.

The Facility is the first part of new loan facilities for the Group, totalling £100 million. Completion of the remaining £63 million, which will have a longer duration and which is in the final stages of the legal and diligence process, is expected to be aligned with the Group's acquisition of a portfolio of 18 modern care homes. Combined, the new facilities will lengthen the Group's weighted average term to maturity and have been secured on attractive and competitive long-term fixed interest rates, providing cash flow certainty to match with the Group's long income profile.

The Group's total borrowing capacity now stands at £257 million comprising the Facility, the existing £50 million Phoenix facility and existing facilities with The Royal Bank of Scotland plc (£70 million committed term loan and revolving credit facility repayable on 5 November 2025) and HSBC plc (£100 million revolving credit facility repayable on 5 November 2023).

Gordon Bland, Finance Director of Target Fund Managers, commented:

"Entering into another facility with Phoenix is testament to both the continued strength of our relationship with our existing lenders and the attractiveness of the Target model.

"The portfolio's performance during COVID has been robust, with the quality of our real estate and our tenants' ability to astutely manage their businesses providing an attractive proposition to lenders. This additional debt funding for the Group aligns with our strategy of continuing to grow the platform sustainably alongside efficiently managing the capital structure. Importantly, in an environment where the future outlook for interest rates remains uncertain, fixing a significant proportion of our interest costs when combined with our inflation-linked income profile helps us to provide sustainable and progressive long-term returns to shareholders."

Target Healthcare REIT plc legal entity identifier: 213800RXPY9WULUSBC04

Enquiries:

Target Fund Managers LimitedKenneth MacKenzie, Gordon Bland01786 845 912

Stifel Nicolaus Europe Limited

Mark Young, Mark Bloomfield

020 7710 7600

FTI Consulting

Dido Laurimore; Claire Turvey; Richard Gotla

020 3727 1000

TargetHealthcare@fticonsulting.com 

Notes to editors:

UK listed Target Healthcare REIT plc (THRL) is an externally managed Real Estate Investment Trust which provides shareholders with an attractive level of income, together with the potential for capital and income growth, from investing in a diversified portfolio of modern, purpose-built care homes.

The Group's portfolio at 30 September 2021 comprised 79 assets let to 28 tenants with a total value of £702.7 million.

The Group invests in modern, purpose-built care homes that are let to high quality tenants who demonstrate strong operational capabilities and a strong care ethos. The Group builds collaborative, supportive relationships with each of its tenants as it believes working in this way helps raise standards of care and helps its tenants build sustainable businesses. In turn, that helps the Group deliver stable returns to its investors.

About Phoenix Group

Phoenix Group are the UK's largest long-term savings and retirement business, with £300bn of assets under administration and c.13 million customers.

Phoenix are a growing and sustainable business with a clear purpose - helping people secure a life of possibilities. This means taking responsible and sustainable investment decisions, and using its presence and voice to advocate on behalf of the UK's savers. Phoenix understands that its scale and expertise means that it has an important role to play for its customers, colleagues and its communities.

As life expectancy continues to increase and the pension landscape continues to shift, Phoenix will continue to be a safe and dependable ally in the journey to and through retirement for millions of customers, by providing the right guidance and products, at the right time, to support the right choices. Phoenix offers a broad range of products for people across all stages of the savings life cycle.

Phoenix's strategy focuses on delivering long term, sustainable value and, to fulfil its purpose, focuses on five key areas to ensure we respond to changing customer needs, manage its capital position well, create value, inspire its people, and put sustainability at the heart of its business.

Phoenix is a FTSE 100 company and features in the FTSE 100 ESG Select Index. In 2020 Phoenix committed to its operations being net zero carbon by 2025 and its investment portfolios by 2050. Phoenix is playing an active role in helping to build back better and greener as it invests for the future. Phoenix is a Living Wage Employer and recognised as a Carer Positive Exemplary for offering the best support to colleagues who are carers.