British Land Extends $547M Credit Facility Amid COVID-19

Law360 (March 26, 2020, 4:58 PM EDT) -- British Land has extended and amended an existing credit facility into a £450 million ($547.4 million) line of credit while suspending rent obligations for the second quarter for certain tenants amid the coronavirus pandemic, the U.K.-based real estate investment trust announced on Thursday.

The company said eight banks are now part of the new £450 million facility. The REIT did not name the banks or provide details of the size or makeup of the prior credit facility, and said the new interest rate, which is pegged to the London Interbank Offered Rate, is unchanged from the prior rate.

“The extended [revolving credit facility] has a headline margin of 90 basis points over Libor … and an initial five-year term, which may be extended to a maximum of seven years at British Land’s request, subject to banks’ consent,” British Land Co. PLC said in a statement on Thursday. “It may continue to be used for our general corporate purposes.”

British Land also said it's suspending rent payments for certain tenants at properties it owns and expects roughly £3 million in loss of rent from those suspensions.

British Land, which invests in London office and retail properties, owned £11.7 billion in assets as of the end of September 2019.

“Our immediate priority is to support those customers who are being hardest hit,” the REIT said. “At sites we control, we are therefore releasing our smaller retail, food and beverage and leisure customers from their rental obligations for three months.”

The company also said that as of Wednesday, it had suspended work at two of its London development projects,1 Triton Square and 100 Liverpool St.

The REIT said 1 Triton Square is nine months from being complete and the Liverpool Street property needs one more month of work.

On the rent deferral point, British Land is also in discussions with its joint venture partners to offer similar rent suspensions.

Those deferrals, British Land said, would result in another roughly £40 million in lost rents for the REIT, assuming the company’s joint venture partners get on board with the plan.

“For other retail, food and beverage and leisure customers experiencing financial challenges because of COVID-19, we are prepared to defer the March quarter day rents and spread repayment over the six quarters from September 2020,” the company said. “On the sites we hold in joint venture or via fund structures, we are working with our partners to agree an appropriate approach.”

Counsel information for British Land's £450 million credit facility deal was not immediately available on Thursday.

--Editing by JoVona Taylor. 

For a reprint of this article, please contact reprints@law360.com.

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