The MedicX Fund Limited £264.5m refinancing of Aviva debt facilities (4726A)

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RNS Number : 4726A

The MedicX Fund Limited

11 September 2018

For immediate release

11 September 2018

MedicX Fund Limited

("MedicX", the "Fund" or the "Company")

GBP264.5 million refinancing of Aviva Investors debt facilities

MedicX, the specialist primary care infrastructure investor in modern purpose-built primary healthcare properties in the United Kingdom and Republic of Ireland, is delighted to announce that it has successfully refinanced GBP233.7 million of existing Aviva loan facilities, as well as increasing the loan facility by a further GBP30.8 million.

MedicX benefits from resetting the Loan to Value ("LTV") covenant on the legacy restructured debt portfolio to 65%, thereby enabling the release of c.GBP72 million of charged property collateral, c.GBP47 million of which has been applied to increase the loan facility. The remaining c.GBP25 million includes eight selected properties that have been released from charge, providing flexibility to undertake asset management projects identified at those locations as well as increasing unencumbered collateral to negotiate future facilities at current market rates. Lastly, the refinancing enables MedicX to take the opportunity to rationalise part of its group structure which will see improved efficiency through the elimination of six non-trading subsidiaries which no longer own investment property.

The refinancing, which was conducted without incurring break fees on the refinanced loan facilities, combined forty six tranches across twenty legacy loan agreements, into two tranches under one new loan agreement.

The new loan facility consists of a new GBP30.8 million 10 year interest only tranche with a fixed interest rate of 3.05% per annum, together with a GBP233.7 million 15 year partially amortising tranche with a fixed interest rate of 4.69% per annum (equal to the blended current cost of the existing facilities). Amortisation of GBP40 million will be spread over the 15 year term of the GBP233.7 million tranche, with the remaining GBP193.7 million repayable at maturity.

The new facility agreement standardises the covenants that will apply to the new facility. These will require the Group to operate with a debt service cover ratio of at least 140% throughout and with an LTV of no more than 75% for the first five years, falling to 70% for years six to ten and then 65% for the remaining term. The facilities will be fully drawn immediately, with the net proceeds from the new GBP30.8 million tranche used in the first instance to repay the GBP20 million drawn RBS Revolving Credit Facility ("RCF"), with the excess held as cash until deployed into investment properties either under construction or forming part of the Company's acquisition pipeline.

Following the refinancing, the Group's adjusted gearing (the ratio of total debt to total assets, in each case net of cash) will increase marginally to 53.3% (June 2018: 52.5%) and the weighted average unexpired term of debt will increase from 11.0 to 11.7 years. The Group's weighted average cost of debt remains almost unchanged at 4.26%, from 4.25% at 30 June 2018.

Helen Mahy, Chairman, said "We are delighted to have agreed a refinancing with our long-term funding partner Aviva Investors. The new arrangements will improve operational efficiency and free up property collateral, enabling MedicX to undertake identified asset management projects and negotiate new facilities at competitive rates which should reduce MedicX's average cost of debt".

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For further information please contact:

   Octopus Healthcare Adviser Limited                                  [phone] 
   Octopus Healthcare Group                                               [phone] 

Mike Adams, Executive Chairman

   Canaccord Genuity                                                              [phone] 

Andrew Zychowski/Helen Goldsmith

Liberum [phone]

Richard Crawley/Jamie Richards

Buchanan [phone]

Charles Ryland/Henry Wilson

Information on MedicX Fund Limited

MedicX Fund Limited ("MedicX", the "Fund" or the "Company", or together with its subsidiaries, the "Group") is the specialist primary care infrastructure investor in modern, purpose-built primary healthcare properties in the United Kingdom, listed on the London Stock Exchange, with a portfolio comprising 166 properties.

The Investment Adviser to the Company is Octopus Healthcare Adviser Ltd, which is part of the Octopus Healthcare group. Octopus Healthcare invests in and develops properties as well as creating partnerships to deliver innovative healthcare buildings to improve the health, wealth and wellbeing of the UK. It currently manages over GBP1.4 billion of healthcare investments across a number of platforms, with a focus on five core areas: GP surgeries, care homes, special education schools, retirement housing and private hospitals. Octopus Healthcare is part of the Octopus group, a fast-growing UK fund management business with leading positions in several specialist sectors including healthcare property, energy, property finance and smaller company investing. Octopus manages GBP8.0 billion of funds for more than 50,000 retail and institutional investors, as well as supplying energy to more than 220,000 customers.

Octopus Healthcare Adviser Ltd is authorised and regulated by the Financial Conduct Authority.

The Company's website address is www.medicxfund.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website), nor the contents of any website accessible from hyperlinks within this announcement, are incorporated into, or forms part of, this announcement.

The Company's Legal Entity Identifier is 2138008POF35FTNFCB25.

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September 11, 2018 12:42 ET (16:42 GMT)