NewRiver agrees £240m unsecured debt facility
NewRiver REIT plc has secured a new £240 million unsecured facility, comprising a £120 million Term Facility Commitment maturing in April 2030 and a £120 million Revolving Credit Facility maturing in April 2031, allowing the company to transition to a fully unsecured debt structure. The Term Facility, with a margin of 190 basis points at the current LTV, will be drawn by January 2027 to refinance the £140 million secured Mall Facility, saving approximately £1.4 million in FY27 compared to immediate drawdown. The Revolving Credit Facility, with a margin of 175 basis points, is £20 million larger and extends maturity from November 2026, reflecting lender confidence in NewRiver's investment-grade rating and portfolio quality.
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NewRiver has agreed a new unsecured £240 million facility comprising a £120 million Term Facility Commitment and a £120 million Revolving Credit Facility ("RCF"). The new facility achieves NewRiver's aims to extract maximum benefit from its current debt structure while improving its debt maturity profile and ultimately allows the Company to return to a fully unsecured debt structure once the Term Facility Commitment is drawn. All four existing lenders have increased their commitments, reflecting NewRiver's investment-grade credit rating and the quality of its portfolio.
Term Facility Commitment - refinancing the Mall Facility
| ● | Unsecured £120 million Term Facility Commitment maturing in April 2030 (four years committed term) |
| ● | Option to extend by three additional one-year terms (to April 2033), subject to lender approval |
| ● | Margin of 190 basis points at the current LTV level |
| ● | Available to be drawn until the end of January 2027 and will be used, alongside existing significant cash resources, to refinance the secured £140 million Mall Facility |
The secured £140 million Mall Facility was retained following the acquisition of Capital & Regional plc in December 2024, principally due to its attractive 3.5% coupon, which runs until January 2027. After that date, and until its maturity in January 2028, the Mall Facility would revert to a floating rate with a margin that is higher than the margin agreed under the Term Facility Commitment. Delaying drawdown of the Term Facility Commitment until January 2027 therefore allows NewRiver to extract maximum value from the Mall Facility's 3.5% coupon.
Prior to drawing the Term Facility Commitment, NewRiver will pay a commitment fee based on a percentage of the margin, which is expected to cost £0.6 million in FY27. This compares to an estimated £2.0 million over the same period if the facility were to be drawn immediately, a saving of approximately £1.4 million. NewRiver's dividend policy, which is linked directly to Underlying Funds From Operations, means that this saving flows through to shareholders.
Hedging is expected to be put in place prior to drawing the Term Facility Commitment. Once drawn, NewRiver will once again have a fully unsecured balance sheet.
Revolving Credit Facility - increasing and extending existing RCF
| ● | Unsecured £120 million Revolving Credit Facility maturing in April 2031 (five years committed term) |
| ● | Option to extend by two additional one-year terms (to April 2033), subject to lender approval |
| ● | Margin of 175 basis points at the current LTV level, with utilisation fees applied if the RCF is above one third drawn |
| ● | A significant margin reduction versus the existing RCF |
The new £120 million RCF is £20 million larger than the facility it replaces and extends the maturity from November 2026 to April 2031.
The increased commitments from all four existing lenders, Barclays, HSBC, NatWest and Santander, from £25 million to £60 million each, is a clear vote of confidence in NewRiver's investment-grade credit rating and the quality of its underlying portfolio. NewRiver was advised on the refinancing by Rothschild & Co.
Will Hobman, Chief Financial Officer commented: "We've refinanced both the Mall Facility and the existing Revolving Credit Facility in a single transaction with the full support of our existing lenders, extending our debt maturity at a reduced margin and on a fully unsecured basis.
With the first phase of our refinancing complete, we're now focused on our growth agenda. We have the balance sheet, the platform and the pipeline to continue deploying capital where our origination strengths and operational expertise create value for shareholders.
The next stage of our refinancing will focus on our £300 million unsecured corporate bond, which matures in March 2028. With over £200 million of cash and available liquidity and an improved maturity profile, we are well placed to manage that process from a position of strength."
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.