Unite secures £121m through Legal & General
The UNITE Group plc, the UK’s largest developer and manager of student accommodation, today announces that it has secured a new £121 million, 10 year debt facility with Legal & General. The all-in cost of the new borrowing, which is at 60% loan-to-value, is fixed at 5.05% for the duration of the loan. The loan will amortise to £109 million, 55% loan-to value, by 2022.
Together with headroom in other existing facilities, the new loan provides capacity to pay down the Group’s remaining facilities that mature in 2013, extending its next refinancing event until May 2014. Following the refinancing, the Group’s weighted average debt maturity increases to 3.5 years.
The transaction reduces the Group’s see through cost of debt by 10 basis points from 5.7% at 31 December 2011 to 5.6% , generating proforma annual savings of approximately £0.6 million. These savings will offset the swap break costs amounting to £4.7 million (3 pence per share) that have been incurred as part of the transaction and will be recognised in the first half of 2012. Following the transaction the proportion of the Group’s debt that is hedged has increased from 69% at 31 December 2011 to 80% …