Derwent secures new 12-year loan facility

Derwent London, a FTSE 250 property firm, has signed a new 12-year secured debt facility with Cornerstone Real Estate Advisers to provide long-term fixed rate debt at a rate of 3.99 per cent until to July 2024.

The facility is for £83m, with the fixed rate equivalent to the gilt rate plus 210 basis points. It completes the refinancing of £575m of Derwent London group facilities that were due to expire in 2013.

The initial loan-to-value ratio is 48% and the covenant is set at 70%.

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The facility was fully drawn on August 1st and has been used to replace the remaining part of the LMS syndicated loan facility which was reduced to £150m in January 2012 and of which £95m was drawn.

Damian Wisniewski, Derwent London's Finance Director, said: "This new long-term, fixed rate loan provides a diversified source of funding for Derwent London at a modest all-in interest rate, taking advantage of the recent falls in gilt rates. It also enhances our debt maturity profile and adds an important name to our established pool of lenders."

The loan provides further diversification of funding sources for Derwent London. It also reduces the proportion of total loans that the company is borrowing from banks to around 50%. At the beginning of 2011, the equivalent percentage was 80%. As a new long-dated loan it also increases the weighted average unexpired term of drawn debt to around 6.6 years.

The loan is secured on two wholly-owned properties in Fitzrovia within London's West End.

The share price rose 0.61% to 1,981p by 08:47.

NR