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CLS completes £61.7m new loan with Scottish Widows

Wed 28 April 2021 09:00 | A A A

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(Sharecast News) - CLS has completed a £61.7m loan with Scottish Widows, secured on a portfolio of five UK office properties, it announced on Wednesday.

The FTSE 250 property investor said the loan replaced two existing loans of £27.4m, which were due to expire before the end of 2021, as well as financing three recent unencumbered acquisitions.

Overall, the transaction would result in net additional cash of £33.7m to CLS, after costs.

"We have had a strong relationship with Lloyds Banking Group, of which Scottish Widows is a part, for many years," siad chief financial officer Andrew Kirkman.

"This long-term financing recognises and incentivises our sustainability commitments while aligning them to those of Scottish Widows.

"Furthermore, this loan diversifies our debt profile and the amount meeting green financing principles."

The company said the 12-year loan had a loan-to-value ratio of 55% and a fixed interest rate of 2.65%, adding that subject to certain conditions, it would be able to remove or substitute properties as security for the loan.

It said the loan, which was in line with the LMA sustainability-linked loan principles, incorporated a 10-basis point margin reduction dependent on the delivery of specific sustainability targets.

The loan would increase the proportion of CLS' total 'green' or sustainability-linked loans to around 20%.

Following execution of the loan and the financings associated with the completion of its five German acquisitions, as well as payment of the final dividend on 29 April, CLS said it would have cash of more than £150m and a loan-to-value ratio of 39% based on its 31 December portfolio valuation, with a further £50m in undrawn facilities.

At 0839 BST, shares in CLS Holdings were down 0.47% at 235.89p.

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