Target Healthc. Regulatory News (THRL)

15 January 2020

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 £50 million committed term loan facility (the "Facility") with ReAssure. The Facility carries an aggregate fixed rate of interest of 3.28% per annum for its 12-year term, maturing in January 2032.

The Facility has been used to repay the Group's existing £40 million term loan with First Commercial Bank Limited ('FCB'), which was due for repayment in August 2022, and provides an additional £10 million of capital (prior to costs) for new investment opportunities. The Group has also closed-out the interest rate swap used to hedge the FCB facility, at a lower cost than that reflected in the most recently announced quarterly NAV.

The Facility further diversifies the Group's existing debt capital structure by introducing an institutional lender providing long term, committed funds whilst extending the weighted average term to maturity of the Group's borrowings from 1.6 years to 4.3 years. Following this announcement, the Group's weighted average cost on its drawn debt, inclusive of amortisation of arrangement costs, is 3.07%.

The Group's total borrowing capacity now stands at £180 million when this new Facility is taken together with its existing facilities with The Royal Bank of Scotland plc (£50 million committed term loan and revolving credit facility repayable on 1 September 2021) and HSBC plc (£80 million revolving credit facility repayable on 29 January 2021).

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

"Securing this institutional long-term debt funding for the Group fits with our stated strategy to source and effectively use modest leverage, with the facility's 12-year duration and attractive fixed rate of interest supporting the Group's objective to provide sustainable long-term returns to shareholders. At the same time, the backing from an institutional lender is a strong endorsement of the investment strategy to build a diverse portfolio of modern, purpose-built care homes, which are best-placed to serve their local markets."

Target Healthcare REIT plc legal entity identifier: 213800RXPY9WULUSBC04

Enquiries:

Kenneth MacKenzie, Gordon BlandTarget Fund Managers Limited 01786 845 912

Mark Young, Mark Bloomfield

Stifel Nicolaus Europe Limited

020 7710 7600

Dido Laurimore; Claire Turvey; Richard Gotla

FTI Consulting

020 3727 1000

TargetHealthcare@fticonsulting.com 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations ((EU) No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

Notes to editors:

UK listed Target Healthcare REIT plc (THR) is an externally managed Real Estate Investment Trust which aims to provide shareholders with an attractive level of income, together with the potential for capital and income growth, through the assembly and management of a portfolio of modern, purpose-built care homes.

The Group's portfolio at 30 September 2019 comprised 63 assets let to 26 different tenants, with a total portfolio value of £511.4 million.

The Group only invests in modern, purpose-built homes that provide the best environments for residents and their care providers and ensure they are let at a sustainable rent. The Group aims to build 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.

ReAssure is part of ReAssure Group plc, a leading closed book life insurance consolidator in the UK. The group focuses exclusively on the acquisition and management of closed book life insurance policies, with a mission to secure and improve customer outcomes for its policyholders.