Empiric refinances GBP32.8m of debt

Empiric Student Property has refinanced GBP32.8 million of existing debt  due to expire in October 2020. The facility has been extended by four years to 31 October 2024 with the existing lender AlB Group (AIB).

The facility is on more favourable terms with a reduced interest cost effective from 30 April 2020 of 1.7 per cent per annum above three-month LIBOR (previously 2.25 per cent above three-month LIBOR) and remains secured against a portfolio of operating assets, held as a lending group, through a wholly owned group subsidiary.

All refinancing for 2020 is now concluded and the next refinancing is not due until November 2022.
 
As announced by the group on 31 March 2020, based on drawn facilities at 31 December 2019, the group has significant headroom against banking covenants calculated on an average basis across the group as follows: loan to value (LTV) covenant 65 per cent compared to actual LTV of 35 per cent*, and interest cover ratio (ICR) covenant of 216 per cent compared to actual ICR of 397 per cent. In addition to this, the group has GBP134 million of uncharged assets.
 
The group currently has GBP14 million of cash and GBP35 million of undrawn debt facilities available. Since the last update, the group has drawn GBP10 million of debt and deferred the balance of the development pipeline with the corresponding development debt of GBP12 million also being deferred.
 
The group will provide a trading update on Wednesday, 6 May 2020 when it expects to have much greater clarity on the amount of support that has been requested by its residents regarding their rent and lease obligations for the final semester of the 2019/20 academic year.
 
Lynne Fennah, chief financial and operating officer of Empiric Student Property, says: “We are delighted to have successfully refinanced this facility early with existing lender AIB, extending the term by four years on more favourable financial terms, and we look forward to continuing to work with AIB. The group’s next refinancing is not due until November 2022.”
 
Gerry Jones, senior director of AIB, says: “We are pleased to provide Empiric with this term extension to their debt facility with AIB. The debt facility is secured against premium student accommodation in a range of key UK university cities and has been structured to meet Empiric's specific refinancing requirements.”