TIDMSOHO
RNS Number : 9406J
Triple Point Social Housing REIT
27 August 2021
27 August 2021
Triple Point Social Housing REIT plc
(the "Company" or, together with its subsidiaries, the
"Group")
INVESTMENT GRADE CREDIT RATING 'A-' AND SUSTAINABILITY-LINKED
FIXED RATE LOAN NOTES OF GBP195 MILLION
The Board of Triple Point Social Housing REIT plc (ticker: SOHO)
is pleased to announce the following updates:
-- The Group has put in place GBP195 million of long dated,
fixed rate, interest only sustainability-linked loan notes through
a private placement with MetLife Investment Management clients and
Barings (the " Loan Notes ") respectively. The Loan Notes have a
weighted average term of 13 years and a weighted average fixed rate
coupon of 2.634%. The Loan Notes will enable the Group to refinance
its existing floating rate Revolving Credit Facility (the " RCF
").
-- Fitch Ratings Limited (" Fitch ") has assigned the Company an
Investment Grade Long-Term Issuer Default Rating of 'A-' with a
stable outlook, and a senior secured rating of 'A' for the Group's
new Loan Notes.
Investment Grade Rating
Fitch's credit rating report highlights a number of favourable
attributes of the Company and the specialised supported housing
sub-sector within which the Company operates. These include:
-- Community-based accomodation "is typically cheaper and more
successful" than institutional alternatives, such as inpatient
hospitals.
-- Long-dated fully repairing and insuring leases with
upward-only rent reviews, with the maintainance obligations
residing with the lessee.
-- A low debt-to-equity ratio with debt/EBITDA around 7.5-8.0x
and a cost base that should benefit from economies of scale.
Fixed Rate Loan Notes of GBP195 million and Refinancing of
Revolving Credit Facility
The new Loan Notes are secured against a portfolio of
specialised supported living properties located throughout the UK
and worth approximately GBP390 million, representing a Day-1 loan
to value (" LTV ") of 50%. The amounts drawn down under the new
Loan Notes are segregated and non-recourse to the Company. Fitch
assigned a senior secured rating of 'A' to the Loan Notes.
The Loan Notes are split into two tranches:
-- Tranche-A: GBP77.5 million with a 10-year term priced at an all-in coupon of 2.403%;
-- Tranche-B: GBP117.5 million with a 15-year term priced at an all-in coupon of 2.786%
The Loan Notes are the first debt instruments issued by the
Company that are linked to sustainability targets agreed with the
lenders.
The loan proceeds of GBP195 million have enabled the Group to
refinance the full GBP130 million drawn under its existing GBP160
million RCF (provided by Lloyds and NatWest). The additional GBP65
million will be used to acquire more income producing, specialised
supported housing properties from the Group's pipeline which is in
excess of GBP150 million.
Whilst currently undrawn, the RCF will remain in place until
December 2023 when it expires. The facility can be drawn at a LTV
of 40% and has a margin in respect of drawn amounts of 1.85% per
annum over SONIA. For undrawn debt under the RCF, the Group pays a
commitment fee of 40% of the margin.
The refinancing will temporarily increase the Group's
consolidated LTV to c.38% (from c.32% as at 31 December 2020) which
is below the Group's stated target of 40% and well below the
Group's limit of 50%.
Annette Bannister, Head of European Infrastructure and Project
Finance at MetLife Investment Management, said:
"We are delighted to have entered into our second debt funding
with the Group. We value the Group's continued effort to invest
into social housing in the UK, with a particular focus on
specialised supported housing for vulnerable people with care and
support needs. This financing underscores MetLife Investment
Management's global commitment to sustainability on behalf of our
clients. We are truly excited to engage in projects that make a
real difference to peoples' lives in communities around the
world."
Amelia Henning, Managing Director Global Infrastructure Debt at
Barings LLC, added:
"We are pleased to have joined MetLife Investment Management as
a new lender to the Group through the sustainability-linked
financing, providing our continued support for the UK social
housing sector. We are looking forward to working closely with the
Group to support its ambitious growth programme in the years to
come."
Chris Phillips, Chairman of Triple Point Social Housing REIT
plc, commented:
"We are very pleased to have secured a premium investment grade
rating from Fitch. This positive endorsement will enable the
Company to pursue a broader strategy in relation to debt funding
and the Group's new long term, attractively priced, fixed rate loan
notes are reflective of this. We were delighted to be working with
Metlife Investment Management again and Barings for the first
time."
Gowling WLG acted as legal adviser to the Group.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Triple Point Investment Management LLP Tel: 020 7201 8989
(Investment Manager)
Max Shenkman
Freddie Cowper-Coles
Isobel Gunn-Brown
Akur Capital (Joint Financial Adviser) Tel: 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
Stifel (Joint Financial Adviser and Tel: 020 7710 7600
Corporate Broker)
Mark Young
Mark Bloomfield
Rajpal Padam
The Company's LEI is 213800BERVBS2HFTBC58.
Further information on the Company can be found on its website
at www.triplepointreit.com .
NOTES:
The Company invests in primarily newly developed social housing
assets in the UK, with a particular focus on supported housing. The
assets within the portfolio are subject to inflation-adjusted,
long-term (typically from 20 years to 30 years), Fully Repairing
and Insuring ("FRI") leases with Approved Providers (being Housing
Associations, Local Authorities or other regulated organisations in
receipt of direct payment from local government). The portfolio
comprises investments into properties which are already subject to
an FRI lease with an Approved Provider, as well as forward funding
of pre-let developments but does not include any direct development
or speculative development.
There is increasing political and financial pressure on Housing
Associations to increase their housing delivery and this is
creating opportunities for private sector investors to participate
in the market. The Group's ability to provide forward financing for
new developments not only enables the Company to secure fit for
purpose, modern assets for its portfolio but also addresses the
chronic undersupply of suitable supported housing properties in the
UK at sustainable rents as well as delivering returns to
investors.
The Company was admitted to trading on the Specialist Fund
Segment of the Main Market of the London Stock Exchange on 8 August
2017 and was admitted to the premium segment of the Official List
of the Financial Conduct Authority and migrated to trading on the
premium segment of the Main Market on 27 March 2018. The Company
operates as a UK Real Estate Investment Trust ("REIT") and is a
constituent of the FTSE EPRA/NAREIT index.
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END
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