Supermarket Income REIT completes debt refinancing

Supermarket Income REIT completes debt refinancing

Supermarket Income REIT has completed a comprehensive debt refinancing exercise.

The debt refinancing exercise involved the cancellation of two shorter-dated debt facilities, the reduction and extension of an existing debt facility and the completion of a new unsecured debt facility with a new lender.

Overall, the company has reduced its loan-to-value (LTV) ratio to 34% (December 2022: 40%) and the weighted average term of debt is now in excess of four years. Over 60% of the company’s debt facilities are now unsecured (December 2022: 48%) and the company has available undrawn committed facilities in excess of £100 million.

·  The company has cancelled two of its shorter-dated debt facilities, including the £77.5 million secured revolving credit facility (RCF) with Barclays and Royal Bank of Canada, and the £62.1 million unsecured debt facility provided by a syndicate of relationship banks.

·  The existing secured interest-only £150 million RCF with HSBC has been refinanced with a new £50 million, secured, three-year RCF with a £75 million uncommitted accordion option. The new RCF has two one-year extension options and a margin of 170 bps over SONIA.

·  A new £67 million, unsecured, three-year debt facility has been completed with Sumitomo Mitsui Banking Corporation (SMBC). The debt facility has two one-year extension options and a margin of 140 bps over SONIA.

The company has also used the value of its existing in-the-money interest rate hedges to extend the term of its hedging arrangements to match the maturity of its debt facilities at no additional cost to the Company. 100% of the Company’s drawn debt is now either fixed rate or hedged to a fixed rate, representing a weighted average all-in cost of debt of 3.1%.     

Ben Green, Director of Atrato Capital Limited, the Investment Adviser to Supermarket Income REIT, said:  “We are very pleased to be working with new lender SMBC in the refinancing of the Company’s debt facilities whilst benefitting from the continuing support of our existing relationship banks. We have also been able to extend hedging to further protect the Company’s balance sheet at no additional cost.

The Company continues to be able to access debt financing at attractive margins, however, given the current macroeconomic environment the Board considers it prudent to maintain a lower LTV.”

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