HSBC and Lloyds link up for £405m student property group refinancing deal
HSBC’S Birmingham-based real estate team was involved in a £405m refinancing deal for student accommodation developer and manager UNITE Group.
The deal provides a new debt funding platform for the Bristol-based firm’s UNITE UK Student Accommodation Fund (USAF).
HSBC and Lloyds Bank Commercial Banking acted as lead arrangers on the deal.
The package is made up of £380m raised though a ten-year sterling fixed-rate bond issue, priced at 3.4%, an £8mliquidity fund provided by HSBC and a £25m five-year revolving credit facility provided by Lloyds Banking Group.
The finance package allows USAF to refinance its existing mortgage-backed security bonds and reduce bank debt.
USAF is an open-ended non-listed real estate fund that focuses on acquiring and operating high quality student accommodation in the UK. It is the largest specialist student accommodation fund in Britain, currently holding a portfolio of 63 properties valued at over £1.3bn, which are located in 20 markets across the UK providing more than 21,000 bed spaces.
UNITE is the largest investor in USAF, which was set up in 2006, with a holding of 16% and operates the properties held by the fund.
Hugh Taylor, HSBC’s regional head of real estate, said: “Student accommodation is now an established asset class in its own right and generally demand continues to outweigh supply for university spaces.
“This bond issue is expected to be attributed a strong credit rating and, as a result, good pricing has been achieved with debt maturity profiles currently not available in the banking market.
“UNITE is a quality business, benefitting from an experienced management team, low gearing, modern residences in attractive locations and strong levels of demand for its products.”
