Palace Capital Plc - Increase in headroom with £40m refinancing

Palace Capital, the UK REIT that has a diversified portfolio of UK regional commercial real estate in carefully selected locations outside of London, today announces that it has signed a new secured £40 million revolving credit facility ("RCF") from NatWest with a maturity of five years, to replace the current £29.4 million NatWest facility.

 

The RCF provides the Group with additional firepower over current drawings to support operational flexibility, deliver further portfolio initiatives and offers wider scope for new investments that meet the Company's selective investment criteria.

 

The Group is currently £106.2 million drawn on its existing facilities (34% LTV using 31 March 2019 values) and the RCF increases the Company's total debt facilities to £154.6 million.  With the benefit of the new facility, the initial weighted average cost of debt (prior to amortisation of fees) at current rates will be 3.2%, reducing to 3.1% if fully drawn (weighted average cost of debt for 12 months to 31 March 2019: 3.3%).

 

At current drawings, the Group is 65% fixed or hedged, and the possibility of additional hedging remains under review.

 

Stephen Silvester, Finance Director of Palace Capital, commented: "We are pleased to build on our long-term relationship with NatWest. This new facility further strengthens our financial platform, takes our average debt maturity out to 4.7 years and provides us with greater flexibility to implement our active programme of portfolio management, refurbishment and development at a highly competitive cost of debt whilst remaining within our targeted LTV range of 30% to 40%."