Schroder Real Estate Investment Trust has served notice to repay 20m pounds of its debt following the disposal of Minerva House in London.
The company, which announced it had completed the disposal of the house for £30m on Monday, will make the loan repayment on January 15th.
The firm must break a pro-rata proportion of its interest rate swaps, crystallising an estimated break cost of £2.9m as a condition of the repayment.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It is also required to reduce the total negative mark-to-market value of the company's interest rate swaps to -£16.3m, adopting the value as at December 20th this year.
The repayment will cut back the company's securitised loan from £134.5m to £114.5m and reduce the annual loan interest cost from £7.7m to £6.5m.
It will leave the company with total cash of about £29.8m, of which approximately £9.2m remains outside the security pool.
"The repayment of the debt is a continuation of the company's strategy to reduce the overall quantum of borrowings which has reduced from £173.5m during 2012," Schroder said in a statement.
"The company continues to pursue refinancing options well in advance of the loan maturing in July 2014."
The company's net loan-to-value following the debt repayment will be approximately 31%, based on the latest property valuation as at September 30th.
Shares fell 0.64% to 38.75p at 16:08 Friday.
RD
-
10 vinyl records worth up to £10,000 - is one in your collection?News Vinyl is experiencing a resurgence and collectors will pay up to £10,000 for some albums - is it time to dust off your old records?
-
FCA: Banks are still short-changing savers
The latest FCA review finds that while public shaming has encouraged providers into offering better deals on savings, many of those with closed accounts are still being shortchanged.
