Supermarket Income REIT refinances its debt facilities

investmentweek.co.uk:

'The company continues to be able to access debt financing at attractive margins, however, given the current macroeconomic environment the board considers it prudent to maintain a lower LTV.'

In a regulatory filing today (15 September), the trust said it has reduced its loan-to-value ratio to 34% from 40% in December 2022, and the weighted average term of debt was now in excess of four years.

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More than 60% of the REIT's debt facilities are now unsecured — up from 48% at the end of last year — and it has available undrawn committed facilities in excess of £100m.

The refinancing exercise included the cancellation of two shorter-dated debt facilities: a £77.5m secured revolving credit facility with Barclays and Royal Bank of Canada, and a £62.1m unsecured debt facility provided by a syndicate of relationship banks.

The REIT's existing unsecured interest-only £150m revolving credit facility with HSBC has been refinanced with a new £50m secured three-year revolving credit facility with a £75m uncommitted accordion option, the trust explained. The facility also has the option to be extended twice by one year each time and a margin of 170bps over SONIA.

Additionally, a new £67m unsecured, three-year debt facility was completed with Sumitomo Mitsui Banking Corporation (SMBC), which also has two one-year extension options and a margin of 140bps over SONIA.

The trust said it has also used the value of its exiting in-the-money interest rate hedges to extend the terms of its hedging agreements in order to match the maturity of the debt facilities at no additional cost.

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The REIT added that 100% of its drawn debt