Supermarket Income REIT Refinances Its Debt Facilities

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 is either fixed rate or hedged to a fixed rate, representing a weighted average all-in cost of debt of 3.1%.

Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: "We are very pleased to be working with new lender SMBC in the refinancing of the company's debt facilities while benefiting from the continuing support of our existing relationship banks. We have also been able to extend hedging to further protect the company's balance sheet at no additional cost. 

"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."

Atrato's CIO Steven Noble and managing director of fund management Rob Abraham will provide an investor presentation to the REIT's shareholders on 21 September.

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