£40 Million debt secured on retirement flats portfolio
Residential Secure Income plc ("ReSI" or the “Company”) (LSE: RESI), which invests in residential asset classes that comprise the stock of UK social housing providers, announces that, as envisaged at the time of its three most recent retirement unit acquisitions, it has obtained £40 million of 25-year fixed rate debt secured against 823 retirement units in its portfolio.
The partially amortising financing package, which has been arranged with an insurance company, is priced at an all-in fixed rate of 3.4877%. Recognising its strong credit metrics, the debt has been classified as investment grade.
ReSI intends to use the proceeds to fund further acquisitions for which ReSI has agreed heads of terms, subject to exclusivity, and is currently performing detailed legal and property due diligence.
The debt was arranged for ReSI by TradeRisks Limited. TradeRisks and ReSI are continuing to work with debt investors to put in place further borrowing against ReSI’s recent and imminent acquisitions.
Ben Fry, of ReSI Capital Management Ltd, ReSI's fund manager, said: “This debt financing forms part of the Company’s strategy to target an overall level of indebtedness of 50% loan to gross asset value and a low cost of long-term funding, which together are intended to enhance the returns to equity available to ReSI shareholders.”
FOR FURTHER INFORMATION, PLEASE CONTACT:
ReSI Capital Management Limited / TradeRisks Limited +44 (0) 20 7382 0900
Jefferies International Limited +44 (0) 20 7029 8000
FTI Consulting +44 (0) 20 3727 1000
Richard Sunderland Email: firstname.lastname@example.org
Residential Secure Income plc (LSE: RESI) is listed on the premium segment of the Official List of the UK Listing Authority and was admitted to trading on the Main Market of the London Stock Exchange in July 2017.
ReSI has been established to invest in portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities, comprising Shared Ownership Homes and Rental Homes (being Market Rental Homes, Functional Homes and Sub-Market Rental Homes) throughout the UK. To date it has deployed c. £240 million, acquiring a portfolio of 2,487 properties, comprising a mixture of shared ownership, local authority and retirement housing.
ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 17 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £10 billion in the social housing, care and other specialist residential property sectors.
ReSI seeks to deliver secure, long-dated, inflation-linked income returns through investment in UK social housing. It aims to meet demand from Housing Associations and Local Authorities for alternative equity-like financing sources that allows them to recycle capital back into socially and economically beneficial new housing, making a meaningful contribution to the UK housing shortage.
Homes acquired by ReSI will predominantly be on a freehold or long leasehold basis (typically 99 years or more to maturity) and benefit from long term (typically 20 years plus) inflation-adjusted cash flows. Acquisitions by ReSI will be limited to Homes with sufficient cashflows, counterparty credit quality and property security that allow the Fund Manager to arrange long-term investment grade equivalent debt.