St. Modwen Properties PLC (LSE: SMP), today announces a successful refinancing with a new £475m unsecured revolving credit facility (“RCF”) with an initial maturity of five years which can be extended to a maximum of seven years, subject to lender consent. The unsecured RCF replaces £488m of current bilateral secured debt facilities.

In line with St. Modwen’s strategic plans, the refinancing provides a reduced cost of debt and improved operational flexibility. Transitioning to unsecured debt financing provides the Company with added flexibility to extend further its debt maturity profile and diversify its sources of unsecured finance ahead of the maturities of its £100m convertible bond and £80m retail bond in March and November 2019 respectively.

As part of the transaction, the Company has cancelled interest rate swaps at a cash cost of c. £6m on completion which will result in initial annual savings of c. £2.5m. A non-cash expense of an estimated £4m will be recognised in the first half of the Company’s 2018 financial year in respect of capitalised arrangement fees relating to the previous facilities.

Based on drawn Group net debt of c. £440m (as at 30 November 2017), St. Modwen’s pro forma all in cost of debt will reduce by 50bps from 4.2% to 3.7%. Debt maturity will increase from 2.7 years to 4.1 years (or 5.5 years if the two one-year extensions are applied), with options to increase this in the future through further unsecured funding.

The syndicate of lenders for the new facility consists of the Company’s existing banking group, being Barclays Bank PLC, HSBC Bank Plc, National Westminster Bank plc and Santander UK plc, in addition to the introduction of AIB Group (UK) p.l.c. St. Modwen was advised on the refinancing by Rothschild & Co.

Rob Hudson, Chief Financial Officer, St. Modwen, commented: “This refinancing represents a key achievement that is in line with our strategic priorities of portfolio focus and capital discipline. The successful transition to an unsecured debt structure will provide us with a greater level of financial and operational flexibility to implement our intended business plan at a lower overall cost of finance.”

LEI number: 213800WMV4WVES8TQH05