Duke Royalty increases and extends revolving credit facility

Royalty-based alternative capital provider Duke Royalty has increased and extended its revolving facility agreement with Honeycomb Investment Trust, it announced on Monday.

The AIM-traded firm said Honeycomb is a credit fund managed by Pollen Street Capital.

It said the new credit facility would enable it to capitalise on the “significant” opportunity available to add new royalty partners looking for long-term, flexible alternative capital since the start of the Covid-19 pandemic.

The material changes in terms relating to the new facility included an Increase to £35m from £30m, with an extended five-year term expiring in February 2026, from the current maturity of September 2024.

It said the interest rate remained at one-month LIBOR plus 7.25% per annum, and confirmed it included an uncommitted accordion facility, under which subject to the maintenance of a loan-to-value threshold, the facility could increase to £55m.

The company said its net debt position was currently £15.3m.

“We are pleased that Honeycomb has given their further support to Duke's team and our business model with the new credit facility,” said chief executive officer Neil Johnson.

“Through a turbulent 2020, Honeycomb were supportive of Duke and, by extension, our royalty partners.

“We look forward to diversifying our portfolio through new deployments and the increased facility gives Duke the extended runway to build revenue and cash flow per share.”

At 1036 GMT, shares in Duke Royalty were up 3.29% at 36.15p.