WELPUT, a specialist fund investing in central London offices, has secured a £200m 50:50 term and revolving credit facility with Wells Fargo.
The facility comprises the £100m term loan already drawn together with a revolving credit facility (RCF) of £100m, both with a maturity of five years plus two options for one-year extensions at WELPUT’s discretion.
WELPUT has drawn down an initial £100m on the new loan at less than half the interest rate of the previous loan, a £132m facility which had an all-in interest rate of 5.33% and was due to mature in December 2015.
The term loan, secured against six of the nine properties in the WELPUT portfolio, is a fixed rate loan at a rate of 1.37% plus margin. Based on a closing loan-to-value ratio of less 20 per cent, the initial all-in interest rate on the term loan is 2.27%.
The RCF is a floating rate loan and both loans carry the same margin which is ratcheted depending on LTV and, in each case, is capped at 1.40%.
The loan structure provides significant operational flexibility in order to manage liquidity, substitute properties and implement the Trust’s stated investment strategy.
WELPUT is managed by Schroders and advised by Quintain Estates and Development.
Andrew MacDonald, head of real estate fnance at Schroders, said: “This refinancing more than halves WELPUT’s interest cost whilst also providing a high level of flexibility for the continued implementation of our successful portfolio strategy. This new facility, combined with the £162 million equity raise which we completed in March, provides a strong platform from which to enhance performance returns for WELPUT’s investors.”
Michael Acratopulo, head of origination for Wells Fargo’s London Commercial Real Estate, said: “We are delighted to be continuing our long standing relationship with WELPUT through this new £200m bilateral facility.
“We have sought to structure the financing so that it will positively assist WELPUT in its open ended format and allow the fund and its unitholders to move forward in its next stage of evolution. We look forward to WELPUT building upon its existing track record with Wells Fargo.”