This article is from the Australian Property Journal archive
ING Real Estate Healthcare Fund has refinanced a $40.4 million St George Bank facility prior to expiry.
This debt facility is associated with the Australian Red Cross Blood Service building in Kelvin Grove, Brisbane.
The facility which was due to expire in April 2011 has been extended by three years from October 2010. The loan to valuation and interest cover ratio covenants remain the same.
But IHF CEO Miles Wentworth said the recent economic conditions have increased the cost of debt finance markedly and as a result, the pricing for this new facility reflects higher market terms.
“Additionally, there is a cost to the fund of refinancing earlier than the expiry date, however management believes the certainty of refinancing outweighs the incremental cost.
“The early refinance at a current competitive margin demonstrates the strong bank support the Fund continues to receive, underpinned by the underlying dynamics of the healthcare sector and high quality of the Fund’s assets,” he added.
Given the combination of all recent IHF debt refinances (facilities totalling $102m have been refinanced since December 2009), earnings will be materially lower for FY 2011 compared to the prior year.
The forecast distribution for the half year ended 31 December 2010 of 3.825 cents per unit remains unchanged and will be met by a combination of current year operating earnings and prior years’ undistributed operating earnings.
Australian Property Journal
