U.K. self-storage operator Big Yellow Group PLC has secured a refinancing package that lowers the company’s average cost of debt and increases the average terms to 7.8 years. Big Yellow signed a five-year, £145 million loan with Lloyds Bank PLC and HSBC Bank PLC, and a seven-year, £70 million loan with M&G Investments Ltd., according to a company press release.
The Lloyds/HSBC loan expires in August 2019. Half of the loan is on term, while the other half is revolving. The M&G loan will be secured over a portfolio of 15 self-storage properties, company officials said. Half of the loan is fixed by way of a “forward start interest-rate derivative.” The balance of the loan is variable, based off the three-month London Interbank Offering Rate (LIBOR), plus margin. The average cost of the M&G loan at the current LIBOR rate would be 3.75 percent, according to the release.
Big Yellow has also agreed to a short-term bridge loan of £70 million with Lloyds Bank, which is repayable immediately on the drawdown of the M&G loan, according to the release.
"We are delighted to have refinanced our core bank facility and further diversified our lending pool through the new loan from M&G,” said John Trotman, Big Yellow’s chief financial officer. “These committed facilities, coupled with our existing £95.7 million loan from Aviva [Commercial Finance], have significantly increased the average unexpired term of our debt facilities to 7.8 years. In total, we now have £238 million drawn out of our total committed facilities.”
Big Yellow Group operates 78 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 4.9 million square feet.
Sources:
- Big Yellow Self Storage: Refinancing
- FinancialDirector: Big Yellow Secures Refinancing Package
