Grainger agrees new debt facilities

Residential property owner Grainger has signed two debt financings, which bring the total amount of debt agreed by the group over the last eight months to around £1.2bn. The deals will see the average life of Grainger’s committed facilities extended to 5.9 years.     

The first new financing is an £840m Forward Start Facility, signed with five relationship banks. £166.5m of this will mature in December 2014, £606m in July 2016, £7.5m in July 2018 and £60m in July 2020.

The second agreement provides a new funding structure for some of the group’s retirement solutions assets, non-recourse to the rest of the group, signed with Partnership Assurance. The initial drawing will be £50m, but more are expected to follow.

The facility is repayable on a property-by-property basis as the assets become vacant and are sold, with interest rolling up on each property.

Grainger will use the £50m from Partnership to reduce its drawings to around £877m. The group’s existing core facilities are £1,093m, of which £927m are presently drawn.    

Mark Greenwood, Grainger’s finance director, said: “These transactions give Grainger far greater certainty over its medium and long-term financing and are in line with our stated financing strategy.

“We are especially pleased that, as well as the continuing support of Barclays, Lloyds, Nationwide and Royal Bank of Scotland, we are able to welcome HSBC to the syndicate. This follows HSBC and Santander working with us to fund our acquisition of the Grainger GenInvest LLPs earlier this year.

“These two new facilities, along with those announced earlier in the year and our proven cash generating capabilities, demonstrate our continued ability to finance the Group and enable it to execute its strategy.”

Commenting on Grainger’s new relationship with Partnership, Ged Hosty, managing director of Equity Release at Partnership said: “We are delighted with this funding arrangement where we have been able to utilise our expertise in the retirement sector to provide an innovative solution which is a good fit for our balance sheet.  We look forward to working with Grainger on similar transactions in the future.”