TIDMDLN
Derwent London PLC
03 August 2012
3 August 2012
Derwent London plc ("Derwent London"or "the Company")
DERWENT LONDON ARRANGES NEW LONG-TERM
SECURED FUNDING
Derwent London plc announces that it signed a new GBP83 million
12 year secured debt facility with Cornerstone Real Estate Advisers
("Cornerstone") on 27 July 2012.
The new loan provides long-term fixed rate debt at an attractive
rate of 3.99% to July 2024 equivalent to the gilt rate plus 210
basis points. There is no amortisation provided for and the loan
offers substitution rights subject to the usual consents. The
initial loan to value ratio is 48 per cent and the covenant is set
at 70 per cent. This is the last component of refinancing the
GBP375m syndicated loan facility arranged by London Merchant
Securities ("LMS") in 2006 and completes the refinancing of GBP575m
of Derwent London group facilities that were due to expire in 2013.
The new loan was fully drawn on 1 August 2012 and has been used to
replace the remaining part of the LMS syndicated loan facility
which was reduced to GBP150m in January 2012 and of which GBP95m
was drawn.
This new loan provides further diversification of funding
sources for Derwent London. It also follows on from the successful
GBP175m convertible bond issue in June 2011 and reduces the
proportion of total loans that the Company is borrowing from banks
to around 50%. At the beginning of 2011, the equivalent percentage
was 80%. This new long-dated loan also increases the weighted
average unexpired term of drawn debt to around 6.6 years.
The loan is secured on two wholly owned properties in Fitzrovia
within London's West End: a 147,900 sq ft office building at 8
Fitzroy Street, W1, which is fully leased to leading international
engineering and design group, Arup; and a multi-tenanted block at
120-134 Tottenham Court Road W1, which extends to Warren Street and
Grafton Way and incorporates the 330 room Grafton Hotel.
Cornerstone is a member of the Mass Mutual Financial Group and
this represents their first real estate lending transaction in the
UK.
As part of this refinancing, Derwent London has cancelled a
GBP65 million interest rate swap, due to expire in March 2013, at a
cost of GBP0.6 million.
Commenting on the transaction, Damian Wisniewski, Derwent
London's Finance Director, said:
"We are delighted to welcome Cornerstone as a lender to the
Company. This new long-term, fixed rate loan provides a diversified
source of funding for Derwent London at a modest all-in interest
rate, taking advantage of the recent falls in gilt rates. It also
enhances our debt maturity profile and adds an important name to
our established pool of lenders."
Charles Weeks, CEO of Cornerstone Europe, said:
"The completion of our first real estate debt transaction so
soon after entering the UK market, and with such a high calibre
partner as Derwent London, is a significant achievement and clearly
demonstrates our intention to put Cornerstone at the forefront of
the senior lending market in Europe. This will complement the
already established position in this field in the U.S., where we
have a debt programme with more than $20 billion of assets under
management, in multiple facets of real estate finance."
Nick Pink, CIO of Cornerstone Europe, added:
"This transaction is a perfect example of the kind of deal we
are keen to undertake in the early stages of what will become, over
time, a broader strategy. In this case, we were able to work with a
top-tier sponsor who was willing to expand and diversify its pool
of lenders, which enabled us to lend against grade A assets with
very long-term, high quality income streams which are able to
support an extended timeframe to maturity."
-ends-
For further information, please contact:
Derwent London +44 (0) 20 7659 3000
Damian Wisniewski, Finance Director
Louise Rich, Head of Investor Relations
Brunswick Group +44 (0) 20 7404 5959
Elizabeth Adams
Notes to editors
Derwent London
Derwent London plc is the largest central London focused REIT
with an investment portfolio of GBP2.6bn as at 31 December 2011.
The Group is one of London's most innovative office specialist
property regenerators and investors and is well known for its
design-led philosophy and creative management approach to
development.
Derwent London's core strategy is to acquire and own a portfolio
of central London property that has reversionary rents and
significant opportunities to enhance and extract value through
refurbishment, regeneration and redevelopment. The Group owns and
manages an investment portfolio of 5.4 million sq ft (501,000m(2)
), as at 31 December 2011, of which 96% is located in central
London, with a specific focus on the West End and the areas
bordering the City of London. Landmark schemes by Derwent London
include Angel Building EC1, Arup Phases II & III W1, Qube W1,
Horseferry House SW1, Johnson Building EC1, Davidson Building WC2
and Tea Building E1.
Derwent London came fifth overall in the 2011 Management Today
awards for 'Britain's Most Admired Companies' and has also recently
won the Estates Gazette Property Company of the Year - Offices
award. In 2011, Angel Building was shortlisted for the RIBA
Stirling Prize following its RIBA London 2011 award and has also
won numerous accolades from organisations such as the British
Council for Offices, the British Construction Industry, the
American Institute of Architects and New London Architecture. In
June 2012 the Tea Building won a RIBA regional award.
For further information see www.derwentlondon.com or follow us
on Twitter at @derwentlondon.
Cornerstone
Cornerstone Real Estate Advisers LLC, with affiliate and
subsidiary offices in the US, UK, Europe and Asia, is one of the
world's top ten largest real estate investment advisers. It
provides core and value-added investment and advisory services,
including a comprehensive suite of private and public real estate
debt, equity and securities expertise and services, to
institutional and other qualified investors around the globe.
Cornerstone is a member of the MassMutual Financial Group.
Cornerstone currently serves more than 170 clients globally. As
at 30 April 2012, Cornerstone and its subsidiary Cornerstone Europe
had $34.7 billion of real estate assets under management.
Cornerstone's debt under management currently totals circa $23
billion and comprises three distinct businesses: core lending
(which currently stands at circa $14 billion), capital markets
(including CMBS, REITs, residential business, with $7 billion), and
alternatives (including high yield lending, mezzanine, bridge, tax
credit and credit facilities with $2 billion). In 2011, Cornerstone
completed $5.7 billion of debt transactions and has already
completed $3 billion of debt transactions in 2012.
Cornerstone's equity business focuses on a range of asset
classes including apartment, office, retail, industrial and hotel
properties across the US, UK and Europe.
More information is at www.cornerstoneadvisers.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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