Target Healthcare REIT PLC Increase and refinance of existing debt facilities (5872E)

TIDMTHRL

RNS Number : 5872E

Target Healthcare REIT PLC

09 November 2020

9 November 2020

Target Healthcare REIT plc and its subsidiaries

("Target Healthcare" or "the Group")

Increase to, and refinance of, existing debt facilities

The Directors of Target Healthcare, the UK listed specialist investor in modern, purpose-built care homes (LSE: THRL) are pleased to announce that the Group has entered into agreements with each of The Royal Bank of Scotland plc ("RBS") and HSBC UK Bank plc ("HSBC") to extend the terms and increase its existing facilities with each.

The Group has increased its existing revolving credit facility with HSBC (the "HSBC RCF") to GBP100 million from GBP80 million. The HSBC RCF has an initial three-year term to November 2023 with the option of two one-year extensions thereafter, subject to the consent of HSBC.

The Group has also increased its existing committed term loan and revolving credit facility with RBS (the "RBS Facility") to GBP70 million from GBP50 million. The RBS Facility has a five-year term to November 2025. The interest cost in relation to the GBP30 million term loan element of this facility has been fully hedged with an interest rate swap as set out in more detail below.

The revised facilities, when combined with the Group's GBP50 million committed term loan facility with ReAssure which expires in January 2032, increase the Group's total borrowing capacity to GBP220 million from GBP180 million.

The extension of these facilities also further improves the Group's existing debt capital structure by extending the weighted average term to maturity of the Group's borrowings to 5.5 years from 3.9 years. Following this announcement, the Group's weighted average cost on its drawn debt of GBP152 million, inclusive of amortisation of arrangement costs, is 2.9%.

The amendments address the transition of the facilities with both HSBC and RBS to SONIA-based loans in advance of the required transition away from LIBOR which would have been required by the end of 2021. The Group has closed out the existing hedge in relation to the term loan element of the RBS Facility, at a cost consistent with that reflected in the most recently announced quarterly NAV, and put in place a new SONIA-based interest rate swap to align with the new term loan under the RBS Facility.

Gordon Bland, Finance Director of Target Fund Managers, commented: "These revised facilities will continue to provide the Group with flexible capital to pursue investment opportunities as they arise while also allowing the Company to manage its capital structure in line with its investment policy. It remains the intention that borrowings, over the medium term, should represent approximately 25 per cent. of the Group's gross assets."

LEI: 213800RXPY9WULUSBC04

ENDS

Enquiries:

Kenneth MacKenzie; Gordon Bland

Target Fund Managers Limited

01786 845 912

Mark Young; Mark Bloomfield

Stifel Nicolaus Europe Limited

020 7710 7600

Dido Laurimore; Claire Turvey; Richard Gotla

FTI Consulting

020 3727 1000

[e-mail]

Notes to editors:

UK listed Target Healthcare REIT plc (THRL) is an externally managed Real Estate Investment Trust which provides shareholders with an attractive level of income, together with the potential for capital and income growth, from investing in a diversified portfolio of modern, purpose-built care homes.

The Group's portfolio at 30 September 2020 comprised 75 assets let to 27 tenants with a total value of GBP637.5 million.

The Group invests in modern, purpose-built care homes that are let to high quality tenants who demonstrate strong operational capabilities and a strong care ethos. The Group builds collaborative, supportive relationships with each of its tenants as it believes working in this way helps raise standards of care and helps its tenants build sustainable businesses. In turn, that helps the Group deliver stable returns to its investors.

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November 09, 2020 02:00 ET (07:00 GMT)