Statement re New Debt Facilit
RIS ANNOUNCEMENT
UK COMMERCIAL PROPERTY TRUST LIMITED
20 June 2008
NEW DEBT FACILITY AND AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENT
Debt facility
In the annual report and accounts of UK Commercial Property Trust Limited (the 'Company') for the period ended 31 December 2007 it was noted that the Company was in discussions with a number of potential lenders so that a debt facility of up to 10% of the Company's net assets could be put in place.
The Board is pleased to announce that it has now put in place an £80 million seven year term loan facility with Lloyds TSB Scotland plc.
The interest margin on the facility is 50 basis points per annum (or 55 basis points if the loan to value exceeds 5% and 60 basis points if the loan to value exceeds 10%). A commitment fee of 20 basis points per annum is payable on undrawn commitments. A prepayment fee of one half of the interest margin is payable if the facility is cancelled prior to the first anniversary of the first drawdown.
The facility contains a loan to value covenant that would be breached if the borrowings of the group exceeded 50% of the gross assets and an interest cover covenant that would be breached if the adjusted net rental income for any three month period was less than 175% of the interest payable for that period.
The Company is permitted to put in place further pari passu debt provided the loan to value does not exceed 50%. The Company is entitled to use the amounts drawn down under the facility for all general corporate purposes which will include making acquisitions in accordance with the Company's investment policy, working capital and share buy backs.
The other terms of the facility are typical for an arrangement of this nature.
The total costs incurred by the Company in connection with the debt facility are expected to be approximately £400,000, including an arrangement fee of £200,000. These costs will be amortised over the term of the facility.
The Board believes prevailing market conditions provide attractive opportunities for the Company to acquire properties to strengthen the Company's performance during and following the current downturn and to enhance the income returns on the property portfolio. The Board and Resolution Investment Services Limited (the 'Manager') will continue to monitor carefully opportunities to utilise the Company's cash resources, both existing and under the debt facility, to enhance returns for shareholders. Taking into account the full amount available under the debt facility and the recent sale of the property at King William Street, London, the Company will have approximately £120 million of funding available to it.
Management fees
The Board is also pleased to announce that it has agreed with the Manager an amendment to the management fee payable to the Manager.
Currently the management fee payable to the Manager is 0.75% per annum of the gross assets of the group. The Board has agreed with the Manager that the base fee of 0.75% per annum will only be applied on the value of the gross assets of the group less the amount of any borrowings and a reduced fee of 0.50% per annum will be applied to the value of the assets of the group represented by any borrowings.
The Board intends to keep both the structure and level of the management fee under review.
Document on display
A copy of the facility agreement will be available for inspection (weekends and public holidays excepted) during normal business hours until 1 July 2008 at the offices of Dickson Minto W.S., Royal London House, 22/25 Finsbury Square, London EC2A 1DX.
Christopher Hill, Chairman of UK Commercial Property Trust Limited, commented:
'We believe that putting in place this facility, with an extremely attractive margin in the current environment, puts the Company in a very strong position to take advantage of current opportunities in the commercial property market. The Company will still have the lowest gearing in its sector but with increased prospects for enhancing its income profile. The Board is pleased that the Manager has supported this strengthening of the Company's position by amending the fee arrangements.'
All enquiries:
Douglas Armstrong, Dickson Minto W.S.
020 7628 4455
Nigel Russell/Graeme Caton/Graham Reaves, G&N Collective Funds Services Limited
0131 226 4411
This information is provided by RNS
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