British Land has signed a new £485m five-year unsecured revolving credit facility (RCF) at an initial margin of 90 basis points with a syndicate of seven banks, in the first sub 100 bps headline margin since 2007.
British Land’s headline margin is back to pre-crisis levels, while the incremental step-ups for utilisation are again becoming shallower.
The new RCF, which may be extended to a maximum of seven years, is an extension and re-pricing of the £310m RCF which was due to expire in May 2018 and replaces the £560m RCF which would have matured in May 2016.
Overall, this refinancing cancels circa £400m of facilities, with a margin below both previous facilities. Together with significantly reduced holdings costs, British Land’s overall financing costs are now lower.
There were four lead banks (in order of largest commitments): Royal Bank of Scotland, Santander Global Banking & Markets, Bank of Tokyo-Mitsubishi UFJ and Barclays Bank, which were appointed joint co-ordinators and bookrunners and mandated lead arrangers. RBS was also documentation and facility agent.
In addition, commitments were also provided by Bank of China and Crédit Agricole Corporate and Investment Bank, which acted as mandated lead arrangers, and by Handelsbanken, as lead arranger.
Lucinda Bell, CFO, British Land said: “We actively manage our debt portfolio to ensure that our finance is competitively priced and appropriate for our strategy.
“This facility extends the term of our strong and well diversified portfolio, whilst the £400m cancellation reduces cost and is consistent with our policy of maintaining flexibility and not gearing up on yield shift. We are very pleased with the level of bank support we have received on this transaction, reflected in a margin that is 25bps lower than the comparable facilities we agreed last year.”