4 Apr 2014 07:00
4th April 2014
Development Securities restructures €47 million, medium-term floating rate loan notes, reducing annual finance costs by £0.8 million and releasing cash collateral of £9.5 million
Development Securities today announces that it has restructured its €47 million floating rate loan notes and associated hedging and cash collateralisation arrangements.
The restructure has reduced the maturity of the loan from 13 to 7 years, resulting in a reduction of £0.8 million per annum in the combined interest, hedging and transaction costs. The restructure will be finance cost neutral in the year to February 2015 as previously capitalised costs will now be written off, with annual savings of £0.8 million delivered thereafter.
At 4.9% per annum, the cost of the restructured, unsecured €47 million loan notes including related interest rate and currency hedging arrangements will be approximately £1.9 million per annum.
The loan restructure has also released cash collateral of £9.5 million to Development Securities which is now available for further investment.
Marcus Shepherd, Finance Director, said: "Whilst this source of finance has been useful for the last few years, it was important for us to renegotiate the terms to be more appropriate in today's economic environment. By structuring revised commercial terms with a maturity reduced to 7 years we have been able to put in place a less capital intensive hedging structure and also deliver annualised finance cost savings. Most importantly, the restructure has released cash collateral, enabling us to invest in new real estate opportunities where we can add value."
For further information, please contact:
Lucy Grimble/Marcus Shepherd, Development Securities
020 7828 4777