Primary Health Properties agrees refinancing on loans

Healthcare facilities investor Primary Health Properties said it had refinanced a number of legacy loan facilities with Aviva Investors and NatWest.

The company on Thursday said it had agreed a new £200m facility for a 15-year term at a fixed rate of 2.52% with Aviva and renewed its existing £100m facility with NatWest.

Sustainability performance indicators have been incorporated into the new Aviva loan based around PHP's existing built environment targets. These focus on the portfolio's EPC ratings and new developments being built to sustainability.

PHP said it would benefit from a margin reduction on the new £200 million facility, conditional on achieving these targets.

“The proceeds of the loan have been used to repay a number of legacy facilities with Aviva Investors totalling £177m at a blended fixed rate of 5% and weighted average term of just under six years. As part of the refinancing a termination cost of £24m has been paid,” PHP said.

PHP added that the NatWest facility had been renewed for three years with options to extend by a further year on the first and second anniversaries of the new facility.

Sustainability indicators have also been incorporated into the new facility based around PHP's existing built environment targets and the group said it would benefit from a margin reduction, conditional on achieving these targets.

The new arrangements cut the group's current average cost of debt to 2.9% from 3.4% while the marginal cost of debt remains at 1.7%, and results in interest cost savings of approximately £5m a year.