Palace Capital agrees new £40m facility with Barclays

Property investment company Palace Capital announced on Friday that it has entered into a new five-year £40m bank facility with Barclays Bank.

The AIM-traded firm said that, at the time of the acquisition of RT Warren Investments, it assumed an existing loan from Barclays Bank of £14.5m - a facility that was due to expire on 31 January.

In discussions with Barclays Bank, the company took the opportunity of not only agreeing a new, increased five-year facility secured on the RT Warren commercial properties, but also to repay its £12.7m facility with Nationwide, which was due to expire in November 2020.

The new facility with Barclays Bank carried a margin of 1.95% over LIBOR, which further reduced the company's average cost of debt to below 3% and extended the average debt maturity to 4.7 years.

As at 24 January, Palace Capital had net debt of £84.2m, representing a loan-to-value net of cash of 31%.

The company said it now has combined facilities of £115.4m, providing greater firepower for further acquisitions.

“We are delighted to have entered into this new facility on very competitive terms as we continue to demonstrate one of the lowest overall costs of debt in our sector,” said chief executive Neil Sinclair.

“We are strong advocates of relationship banking and have been well supported by our key lenders through this latest growth phase.

“The new facility will enable us to pursue more opportunities to grow both income and capital value, underpinning our commitment to enhance cash returns to our shareholders.”