Grainger secures £580m HSBC-led five-bank syndicate facility

Grainger, the listed residential property owner and manager, has refinanced and enlarged its UK clearing bank-led syndicate facility to £580m while capitalising on tightening senior margin spreads.

GraingerThe new facility is approximately 50:50 part revolving credit facility (RCF) and part term loan, both tranches carrying the same margin. The facilities carry a floating charge over UK assets only.

The five-bank syndicate – comprised of Barclays Bank, Nationwide, Royal Bank of Scotland, HSBC and Allied Irish Bank – has signed a five-year facility at a margin of 170 basis points over three-month LIBOR, down 50 bps from the October 2011 legacy facility which was due to mature next summer.

Participations ranged from £175m to £30m, with HSBC and AIB’s commitments at either end of the spectrum, respectively.  In between were RBS, Barclays and Nationwide in respective order of participation.

The make-up of the syndicate has seen Lloyds leave, HSBC increase to the group’s largest individual lender and AIB join for the first time. All covenants remain unchanged.

Grainger’s average cost of debt reduces to 50 bps to c.4.6%, while the average maturity is now c.5.8 years. As at 31 July 2015 and following significant recent investment into regional market rented assets, net debt stood at c.£1,144m.

Mark Greenwood, Grainger’s finance director, said: “We have been making considerable progress in diversifying our sources of funding and reducing the cost of our debt facilities, which this refinancing further supports.

“We will continue to review all other sources to ensure that we have the most competitive cost of debt to pursue our strategy of accelerating our push into the private rented sector.”

Grainger is separately looking to refinance a maturing bilateral debt facility.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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