Taliesin Property Fund limited
Refinancing Update
Taliesin Property Fund Limited (“Taliesin” or “the Fund”), the AIM quoted fund focussed on the Berlin residential property market, announced in its strategic update in February the intention of the Board to explore various options to return value to shareholders. As part of that process, Taliesin is pleased to provide details of a recently completed refinancing and swap extension.
Taliesin has replaced the existing lenders on the Friedrichshain based portfolio with a new facility provided by DGHyp AGbank. The new facility is a five year traditional fixed rate loan (no swaps) with an interest rate of 3.09% per annum. This replaces a multi bank facility with interest costs close to 200bp above the new loan. Reflecting the significant investment made in the portfolio by Taliesin over the past few years and the large rent increases, the new loan facility will initially be for Euro 14 million with a further Euro 1 million available for draw down on rent and valuation targets being met. This compares to a previous loan amount of Euro 9.8 million. Full draw down of the new loan will still leave the Fund with a conservative leverage ratio of around 67%.
Taliesin has also been able to extend the duration of a number of its swap contracts held with EuroHypo AG in order to match durations with the underlying loan facilities and to take advantage of lower market interest rates. This ‘blend and extend’ exercise has been carried out on a total of Euro 35.4 million of swaps and will generate annual interest cost savings of around Euro 200,000 for the Fund.
The Board is pleased to announce progress in line with the strategy update earlier in the year. The aim of higher leverage as a means of releasing equity for share buy-backs has been realised. The Board is also seeking increased buy-back authority in the upcoming AGM. The strategy update also targeted improved cash-flow from higher rents and reduced expenses and Taliesin is pleased with progress of these measures.The Board continues to explore further limited asset sales and is in negotiations with other lenders over further increases in loans to reflect the increased rental income of the portfolio. Taliesin expects to release first half earnings results in late September.
For further information, please contact:
Taliesin Property Fund Limited
Mark Smith, Director 01534 700 000
Westhouse Securities Limited
Tim Metcalfe/Petre Norton 020 7601 6100