Regional Reit repays its retail bond in full by August deadline

Had proposed a capital raising of £110.5m at the end of June to pay back its debt

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Regional Reit has repaid its £50m retail bond, in full, which matured earlier this week (6 August).

At the end of June, the property investment trust proposed a capital raising of £110.5m to pay back its £50m retail bond by the deadline and reduce its bank facilities, thereby avoiding liquidation. The capital would also provide £28.4m, which the Reit’s board said will “provide additional flexibility to fund selective capital expenditure on assets, which will enhance earnings in the near term and value in the mid to long-term”.

On the 18 July, shareholder approval was given for Regional Reit to consolidate its shares at a ratio of one consolidated share for every 10 ordinary shares – this was put in place at the end of last month. In addition to a successful £110.5m capital raise, a further £26m was secured, which Regional Reit’s board said will be used to further reduce debt. It added this means the company will have “greater headroom under the group’s covenants in such facilities and the LTV [loan-to-value] decreasing to 41% from 57% prior to the fund raising, in line with the company’s long-term target range.”

See also: Regional REIT considers new share offer at ‘material discount’ amid performance woes

At the end of last year, Regional Reit published its asset disposal plan in a bid to reduce its LTV to below 40%. At the end of 2023, the Reit’s LTV stood at 55.1%.

Now that the trust’s 4.5% retail bond has been repaid, the trust’s debt weighs in at £353m with a weighted average cost capital of 3.4%.

Stephen Inglis, CEO of London & Scottish Property Investment Management said: “On behalf of the board we would like to thank our shareholders for their continued support and participation in the fundraise, which has enabled the company to repay the retail bond in full and reduce our debt further to an LTV in line with our long-term target.

“Additionally, we have set aside further funds to make improvements and enhance the attractiveness and quality of core assets with the aim of growing rental income and reducing vacancy rates. We look forward to updating shareholders further on our continuing progress.”