26 April 2012
Big Yellow Group PLC
New £100 million 15 year loan with Aviva Commercial Finance Limited
Big Yellow Group PLC ("the Group" or "Big Yellow") announces that it has entered into a new £100 million 15 year loan with Aviva Commercial Finance Limited, secured over a portfolio of 15 freehold self storage centres valued at £242.1 million at 29 February 2012. The annual fixed interest rate on the loan is 4.90%.
The new 15 year term loan has been deployed to repay and cancel £100 million of the Group's core bank debt facility, reducing it to £225 million of which £190 million is drawn. This facility expires in September 2013 and is secured on the remainder of the Group's self storage centres. The repayment and cancellation has been disproportionately applied against HSH Nordbank's commitment which has been reduced from £150 million to £65 million.
The Group has cancelled £100 million of interest rate derivatives at a cost of £9.2 million. In addition to the Aviva fixed rate loan, there is a residual £90 million interest rate swap in the core bank debt facility at 2.99% plus margin to September 2015, with the remaining £100 million of the core bank debt paying at floating rates plus margin. As a result of this transaction, we have repaid £100 million of bank debt which was costing 4.8% per annum, with a 15 year loan fixed at 4.9% per annum. The Group's proforma average cost of debt remains at 3.7%.
The loan amortises to £60 million over the course of the 15 years, consistent with the Group's medium term debt reduction strategy. The debt service is payable monthly based on fixed annual amounts. The loan outstanding on the fifth anniversary will be £89.8 million; £76.7 million on the tenth anniversary, with £60 million at expiry in April 2027.
John Trotman, Chief Financial Officer of Big Yellow commented, "We are delighted to have arranged this new loan with Aviva which provides a stable core of long term financing for the Group from a new debt provider to the business. We will now enter into discussions with our banking group, who continue to be supportive, with a view to refinancing the core bank debt facility in the current year."
Surplus land sales update
The Group also announces that it has completed the sale of its site at Blackheath to Hexagon Housing Association Limited for a consideration of £4.5 million. In addition, we have exchanged contracts on the sale of the surplus one acre site adjacent to our new flagship Chiswick store for £4.75 million, with completion expected in July 2012. As we have previously reported, the Premier Inn hotel we are developing at Richmond is due for completion this summer with further consideration to be received on the sale of the building of £7.4 million. At 31 March 2012 there was a further £2.8 million of costs to complete the development.
For further information, please contact:
Big Yellow Group PLC 01276 477811
James Gibson, Chief Executive Officer
John Trotman, Chief Financial Officer
Weber Shandwick Financial 020 7067 0700
Nick Oborne, John Moriarty
Notes to Editors
Big Yellow Group PLC is the best known and one of the most dynamic self storage groups in the UK. It was founded in September 1998 by Nicholas Vetch, Philip Burks, and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in June 2002.
Big Yellow has expanded rapidly and now operates from 65 stores, 57 in London and the South, two in Sheffield, and one each in Birmingham, Edinburgh, Leeds, Liverpool, Nottingham and Stockport. Our Chiswick store by the M4 flyover is currently under construction and is due to open next week. We own a further four development sites, of which three have planning. Of the 70 total stores and sites, 59 are held freehold and four long leasehold (together representing approximately 94% by value of the total property assets); seven stores are held short leasehold. All the stores have distinct yellow branding, with the majority being within the M25 or in strong urban conurbations. The Group currently operates from a platform of 4.1 million sq ft. When fully built out the portfolio will provide approximately 4.4 million sq ft of flexible storage space.
The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Its focus on the location and visibility of its buildings, coupled with excellent customer service, has created the most recognised brand name in the UK self storage industry.
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