Refinances debt
Great Portland Estates PLC
08 March 2006
8 March 2006
Great Portland Refinances Debt to Cut Annual Interest Costs
Great Portland Estates plc ('GPE') announces a series of measures to enhance the
Group's financing structure by shifting the emphasis away from long-dated
secured debt to medium-dated unsecured debt, while optimising the interest cost.
The company is replacing its existing bank facilities with a new £300 million
committed facility. Initially committed until 2011, the facility can be extended
by the Group, with the banks' agreement, after the first and second
anniversaries to 2012 and 2013 respectively. The facility has been provided by
Barclays, Lloyds TSB, Royal Bank of Scotland, Calyon and Eurohypo at an interest
cost significantly below the two previous facilities which have been cancelled.
GPE has also signed a new £110 million one year committed facility with Barclays
and Royal Bank of Scotland, which can be extended for a further year at the
Group's option without the need for further bank consent.
Separately over the last week, GPE has purchased £62 million nominal or 66% of
the outstanding issue of its 7.25% debenture stock 2027. The debentures have
been purchased in the market at a total cost (before accrued interest) of £88
million. £32 million nominal now remains outstanding, out of an original issue
size of £100 million nominal.
These transactions will benefit the Group by:
• Extending the Group's major facility refinancing date from 2009
to 2011/13;
• Enhancing adjusted earnings per share and improving interest cover;
• Reducing the Group's fully drawn average interest cost by around 40bp
pa.;
• Increasing NAV per share growth from 2006/07;
• Releasing around £100 million of asset encumbrances to improve
operational freedom;
• Providing tax relief to shelter the Group's expected 2005/06 tax charge;
and
• Creating additional financial resources to fund the Group's growing
development programme and potential acquisitions.
As a result of the redemption premium on the debenture purchases, the Group's
adjusted NAV per share will be impacted by approximately 10p (net of tax
relief). The triple NAV (adjusting for marking debt to market and for the
contingent liability to taxation on chargeable gains) will be largely unaffected
by this transaction.
Commenting on the above, Timon Drakesmith, Finance Director, said
'We are delighted to have gained the support of a high quality banking group who
have committed to refinance our exciting growth plans. We have more than doubled
the Group's facilities, reduced the margin over LIBOR by a quarter and extended
the maturity of the main facilities until at least 2011. The debenture
repurchase will also create significant financing and flexibility benefits for
the Group.'
Contacts:
Great Portland Estates plc
Toby Courtauld, Chief Executive 020 7647 3042
Timon Drakesmith, Finance Director 020 7647 3034
Finsbury Group
Edward Orlebar 020 7251 3801
This information is provided by RNS
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