Hibernia Reit signs €100m property debt deal with BoI
Published 13/08/2014 | 02:30
HIBERNIA REIT secured €100m in debt financing from Bank of Ireland to finance new commercial property deals.
The real estate investment trust said on Tuesday it entered into a €100m three -year revolving credit facility secured against a corporate level debenture.
The deal means Hibernia now has access to about €140m in debt and cash that it can use to finance future property purchases.
This is Hibernia's third round of financing since it listed on the Irish stock exchange last year.
It has twice tapped shareholders but at the company's annual general meeting last month, Hibernia CEO Kevin Nowlan made it clear that he saw debt financing as the next step for the company.
Yesterday, Hibernia CFO
Tom Edwards-Moss said the firm was "very pleased to have entered our first corporate debt facility, which provides us with flexible funding at attractive rates with which to invest in and grow our portfolio".
The agreement was broadly welcomed by the market.
Goodbody Stockbrokers said the deal was "a significant milestone in the development of Hibernia's investment strategy and will position it strongly with potential vendors, particularly the likes of Nama and the banks as they accelerate loan disposal programmes".
The proceeds may be put to work sooner rather than later. Hibernia has previously admitted that it is in exclusive talks to buy Cumberland House - a large office blcok in Dublin 2 in need of refurbishment.
That would fit with Hibernia's investment strategy which has been focused on properties that may have a relatively low yield at present but have significant upside, whether it be through upcoming rent reviews or the chance to renovate and upgrade the buildings, thus attracting a higher rent.
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