Real estate investment trust Civitas Social Housing has secured a new seven-year term, interest-only loan facility of £84.55 million from M&G Investment Management, a new lender to the company.

The facility is priced at 2.75% above a fixed rate set by reference to the LIBOR swap rate of the loan term, and is repayable seven years from the date of utilisation. It is secured by an existing portfolio of specialist supported living assets.

The facility is designed to support the company’s growth plans and Civitas said it will use the proceeds this year to purchase high-quality properties which it expects to enhance rental income and, in due course, dividend cover.

The drawdown of the facility will increase the company’s loan-to-value ratio to 34.6%, maintaining the company’s objective of a gearing level of around 35% of gross portfolio asset value with a ceiling of 40%.

Michael Wrobel, chairman of Civitas, said: “We are delighted to have secured this new loan facility from M&G, a leading institutional lender with extensive experience and understanding of the social housing sector. We expect this loan to be utilised over the coming months to bring forward our extensive pipeline of high-quality properties and continue to deliver on our dual mission of stable long-term income for our shareholders and excellent long-term accommodation for the residents in our properties.”

Duncan Batty, director at M&G Investment Management, added: “We are very pleased to provide this new seven-year facility for Civitas to enable the company to continue to expand its portfolio of dedicated care-based accommodation.”

Date published: February 19, 2021

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