Pricoa deploys more than £550m long-dated senior debt since July

By James Wallace - Tuesday, October 06, 2015 15:34

Pricoa Mortgage Capital has closed a £130m long-dated senior loan, the insurance lender's third in four months collectively amounting to more than £550m, underscoring borrowers’ eagerness to lock-in low cost of debt ahead of next year’s anticipated interest rate hikes.

GCP Student Living, the UK’s first student accommodation-focused REIT, has financed a five–strong portfolio of student accommodation blocks in London, together worth £390m, with a nine-year senior loan, priced at circa 130 basis points.  The all-in coupon is 3.07%. The LTV is around 33%.

The assets include Scape Shoreditch, which exchanged today in £166m deal, as well as Scape Surrey and The Pad 2.

Pricoa’s loan also partly refinanced a £40m Barclays Bank facility.

This is Pricoa’s third long-dated senior loan closed since July, the three loans collectively amount to£555m of long-dated senior debt deployed.

Pricoa, the commercial mortgage lending business of Prudential Financial, said the dals are indicative of the current demand for fixed rate senior financing, as borrowers seek to lock-in low costs of debt.

In August, Pricoa closed a 10-year £155m senior loan to Access Self Storage, secured by a portfolio of properties located in Greater London, the Midlands and the South.  In July, Pricoa closed a £270m loan to refinance Oxford Properties and Union Investment Real Estate’s Watermark Place.  

David Gingell, director of European originations at Pricoa said: “We are delighted to support GCP Student Living's dual goals of continued asset expansion and sustainable income returns for their investors, securing long term fixed rate finance across their portfolio,”

Tom Ward, partner at Gravis Capital Partners, investment manager to GCP Student Living, said: “We are very pleased to have entered into a partnership with Pricoa. The new facility provides the company with long term fixed rate debt financing at a strong point in the cycle and thereby secures the continued financial stability of the company for the forthcoming years.”

Chalkhill Partners advised GCP Student Living on the transaction.

Chalkhill has advised on and executed in excess of £250m of debt for the student accommodation sector. In 2014 Chalkhill arranged, structured and placed a non-bank agency CMBS for Avenue Capital Student Real Estate, in two transactions totalling £136.5m and rated single-A by S&P.

jwallace@costar.co.uk

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