Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has successfully completed a comprehensive debt refinancing exercise, resulting in a reduced loan-to-value (LTV) ratio of 34% compared to 40% in December 2022.
This lower LTV, which measures the amount of debt against the value of Supermarket REIT’s portfolio, results in a lower risk profile for the group.
Supermarket REIT’s weighted average term of debt is now over four years, and over 60% of the company’s debt facilities are unsecured, compared to 48% in December 2022.
The company has access to £100 million in undrawn debt facilities.
As part of the refinancing round, Supermart REIT cancelled two of its shorter-dated debt facilities, comprising the £77.5 million secured revolving credit facility (RCF) with Barclays and Royal Bank of Canada (TSX:RY), and the £62.1 million unsecured debt facility provided by a syndicate of relationship banks.
An existing secured interest-only £150 million RCF with HSBC has been refinanced with a new £50 million, secured, three-year RCF with a £75 million uncommitted accordion option.
Additionally, a new £67 million, unsecured, three-year debt facility was completed with Sumitomo Mitsui Banking Corporation.
Supermarket REIT has also used the value of its existing in-the-money interest rate hedges to extend the term of its hedging arrangements to match the maturity of its debt facilities at no additional cost.
100% of the company's drawn debt is now 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 Limited (LSE:CAPD), 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 whilst benefitting 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."