Vital secures longer term debt at lower cost

11 April 2012
Vital secures longer term debt at lower cost and more favourable covenants

Vital Healthcare Management Limited (‘Manager’), the manager of Vital Healthcare Property Trust (‘Trust’) today announced that it had secured new attractive bank funding terms.

The Manager confirmed today that it had secured a renewal of the bank facility for the Trust with ANZ National Bank. The facility is diversified into two tranches:

• Tranche 1: 5 years for A$125m – available through to 31 March 2017

• Tranche 2: 3 years for A$100m and NZ$20m – available through to 31 March 2015

David Carr, Chief Executive of the Manager said “when compared to the Trust’s prior facility, renewing the bank facility allows the Trust to take advantage of a competitive environment and reduces the line and margin fees that will be applied to the respective tranches. Diversifying the term of the facility across two expiry dates provides greater flexibility when undertaking future reviews of bank facility requirements and improves the overall tenor of the Trust’s debt”.

Other favourable terms and conditions have been negotiated, including, but not limited to increasing the Trust’s loan-to-value ratio (‘LVR’) from the current 45% to 50%, aligning it with the Trust Deed covenant of 50%. The interest cover covenant remains unchanged, with a requirement for earnings before interest and tax to be equal to or greater than 2.00 times the interest expense.

Mr Carr said “the new facility will only be partially drawn down, with the balance of circa A$57m and NZ$15m providing headroom for the Trust to continue with its prudent capital expansion and incremental acquisition opportunities”.

ENDS

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