LONDON (ShareCast) - (Sharecast News) - Commercial real estate investor Palace Capital has signed a new secured £40m revolving credit facility with NatWest with a maturity of five years, it announced on Wednesday, to replace the current £29.4m NatWest facility.
The AIM-traded real estate investment trust said the facility would provide it with "additional firepower" over current drawings, in a bid to to support operational flexibility, deliver further portfolio initiatives and have wider scope for new investments that met its investment criteria.

It said it was currently £106.2m drawn on its existing facilities, with a 34% loan-to-value ratio using the 31 March values, explaining that the facility was increasing its total debt facilities to £154.6m.

The board said that, with the benefit of the new facility, the initial weighted average cost of debt prior to amortisation of fees at current rates would be 3.2%, reducing to 3.1% if fully drawn, which compared to a weighted average cost of debt for the 12 months ended 31 March of 3.3%.

At current drawings, the group was 65% fixed or hedged, with the possibility of additional hedging said to be under review.

"We are pleased to build on our long-term relationship with NatWest," said Palace Capital finance director Stephen Silvester.

"This new facility further strengthens our financial platform, takes our average debt maturity out to 4.7 years and provides us with greater flexibility to implement our active programme of portfolio management, refurbishment and development at a highly competitive cost of debt whilst remaining within our targeted loan-to-value range of 30% to 40%."

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