Life Science REIT has refinanced the £35.9m development debt facility it acquired with Oxford Technology Park.
The asset-level facility had a high interest rate and an expiry date of June 2023. The interest cost is expected to reduce by approximately 100bps.
The REIT refinanced the facility by drawing down £26.3m from its existing £150m HSBC facilities, topping up the rest with its cash resources.
Simon Farnsworth, managing director of the REIT’s investment adviser, Ironstone Asset Management, said: “We have taken the opportunity to repay the outstanding OTP debt earlier than the termination date in June 2023, prudently using the company’s existing HSBC facility to minimise interest and debt facility management costs following the lapse of significant early redemption penalties.
“Additionally, this will provide the potential for further refinancing of OTP in the near future.”
Life Science’s HSBC facilities include a £75m fully drawn term loan capped at a maximum cost of 4.25% per annum until March 2025 and a £75m revolving credit facility with a cost of Sonia plus 2.25%.
Following the refinancing the REIT still has £48.7m available in the RCF for future use.
The additional drawdown is secured against the REIT’s acquisitions at 7-11 Herbrand Street, WC1, Lumen House near Oxford and the Merrifield Centre in Cambridge. Oxford Technology Park is now unsecured, meaning it could be deployed at a later date to raise more debt.
Following the refinancing, the loan-to-value ratio for the portfolio, based on its £413m June 2022 valuation, is 24.5%.
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