Life Science REIT agrees £150m debt financing facility

Life Science REIT has agreed a £150m debt financing facility with HSBC UK, it announced on Wednesday, consisting of a £75m three-year term loan, and an equally-sized revolving credit facility.

The AIM-traded real estate investment trust said it was its first debt facility.

It said the facility had an interest rate on drawn amounts of 225 basis points over SONIA - currently equivalent to a total cost of 2.9%.

The facility was currently undrawn, but would give the company additional financial resources to execute its strategy of acquiring life science properties across the ‘Golden Triangle’ of Oxford, Cambridge and London.

Life Science said the debt facility was secured on the properties already acquired since its initial public offering, with market normal covenants on loan to value and interest cover.

The borrowing structure would allow the firm to flexibly add new properties to the security pool to reach its optimal gearing target, as it acquired new assets.

“The company has a prudent approach to gearing and is targeting a LTV ratio of 30% to 40% over the longer term,” said Simon Farnsworth, managing director of Life Science’s investment manager Ironstone Asset Management.

“The debt facility announced today provides us with the flexibility to improve the efficiency of our balance sheet as we continue to make significant progress on a number of acquisition opportunities whilst also enhancing our financial resources.”

At 0859 BST, shares in Life Science REIT were down 0.25% at 100.75p.