Capco announces debt facility to refinance loan

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London-and JSE-listed property group Capital & Counties Properties PLC on Tuesday announced a new GBP300m debt facility to refinance its 2013 Covent Garden loan.

The refinancing included GBP60m of debt capital for acquisitions to allow Capco to further its repositioning strategy in the area and was led by BNP Paribas and HSBC Bank plc along with a further consortium of lenders. 

Capco said it currently had over 830,000 square feet of retail, leisure, residential and office holdings in Covent Garden, including the Market Building and was continuing to extract value through its proactive asset management strategy and repositioning of the neighbourhood. Following the recent opening of Rugby Ralph Lauren and several new lettings in the pipeline, the estate remains on track to meet its 2013 ERV target of GBP50m, a demonstration of Capco's successful strategy of unlocking value in Covent Garden. 

The new facility was comfortably oversubscribed, and the consortium of lenders includes BNP Paribas, HSBC Bank plc, Bayern LB, Lloyds Banking Group, Deutsche Pfandbriefbank and Santander. 

Capco said that the key features of the new loan were the extension of the maturity on GBP300 million of the Group's debt until October 2016, with a further 2 year extension available at Capco's option subject to meeting certain financial covenants. One hundred and fifty million pounds had been drawn initially. A further GBP90 million was available allowing Capco to use its cash balance more efficiently by paying down debt and redrawing when required. 

In addition, GBP60 million of the facility was available to finance existing Covent Garden assets not currently secured, or to finance new acquisitions in the Covent Garden area. 

Lastly, the financial covenants include a loan-to-value covenant of 70% and interest cover ratio of 130%. 

The cost of debt on the new facilities will be circa 4% on the drawn amount, with hedging in place using swaps and caps. Interest rate swaps relating to the previous facility have been closed out at a cost of GBP13.5 million. 

"This new debt facility allows us the flexibility to manage and add value to our exciting and growing portfolio at Covent Garden. It supports our strategic plans to consolidate the ownership in this vibrant part of London through selective acquisition - building on one of London's great estates," said Finance Director of Capco Soumen Das. 

"Capco is a perfect example of the sort of company that bank partners wish to work with. It's an exciting company with prime central London assets, focused on Covent Garden and Earls Court, and we are pleased to support a genuine player in the industry with such a growth strategy," said Head of UK Real Estate Finance at BNP Paribas Peter Denton and Global Head of Real Estate Finance at HSBC Bank plc Matt Webster.

 


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