Ground Rents Income Fund PLC Loan Refinancing (3641Z)

TIDMGRIO

RNS Number : 3641Z

Ground Rents Income Fund PLC

10 January 2020

Ground Rents Income Fund plc

(the "Company")

LOAN REFINANCING

The Company is pleased to announce that it has refinanced its existing GBP19.5 million loan with Santander UK plc on the following terms:

-- A new five year, GBP25 million facility with Santander UK plc comprising a GBP12.5 million term loan and a GBP12.5 million Revolving Credit Facility (RCF)

-- The facility is at a margin of 1.85% per annum above 3 month LIBOR, a reduction of 45 basis points compared to the current margin of 2.30%

   --      Loan term extended from its current maturity of November 2021 to January 2025

-- Total initial amount drawn will be approximately GBP15.5 million comprising the term loan and GBP3.0 million of the RCF

-- A new interest rate swap will be put in place to hedge the interest rate on the GBP12.5 million term loan and approximately GBP5.0 million of the RCF is likely to be hedged via an interest rate cap

-- Based on a total initial amount drawn of GBP15.5 million the loan-to-value on the charged pool of assets will stand at 24% versus a covenant of 45%, which increased from 40% as part of the refinance, providing undrawn headroom of GBP9.5 million (the Company's overall borrowing limit of 25% of gross assets remains unchanged)

The refinancing delivers the following benefits to the Company:

-- Interest rate is reduced from 3.37% on the existing facility to approximately 2.76% per annum generating an interest rate saving of approximately GBP120,000 per annum (based on existing drawn amount of GBP19.5 million and hedging having been agreed at current swap / Libor rates)

   --      Removes refinancing risk in 2021 and capitalises on current low interest rates

-- The increased facility amount and RCF element enables the Company to maximise balance sheet efficiency and provides operational flexibility

-- Following the refinancing the Company will have GBP67.2 million of uncharged assets and a consolidated net loan-to-value of approximately 11.3%, based on the independent valuation and financial position as at 30 September 2019

James Agar, Fund Manager, commented:

"The refinance was a key objective identified in the review of the Company's strategy. The refinancing with Santander increases net income and reduces risk with longer term debt. The RCF component provides important operational flexibility and capacity to take advantage of opportunities in the market."

Contacts

Schroder Real Estate Investment Management Limited

James Agar / Matthew Riley

020 7658 6000

N+1 Singer (Broker)

James Maxwell / Ben Farrow

020 7496 3000

Tavistock (Media)

James Whitmore / Jeremy Carey

020 7920 3150

Appleby Securities (Channel Islands) Limited (Sponsor)

Andrew Weaver

01481 755 600

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END

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