Healthcare property investor Primary Health Properties (PHP) has raised €70 million through a loan note issue.
The new senior secured notes carry an interest rate of 1.509 per cent and have a term of 12 years.
The London-listed investor, which intends to invest €300 million in Irish acquisitions up to the end of 2021, said some of the funds will be used to finance Irish developments.
Proceeds from the issue have also been used to repay and cancel a €32.6 million loan facility with Bank of Ireland. The facility was acquired as part of the merger with MedicX Fund earlier this year and some €26.2 million had been drawn down at a 3 per cent margin,
PHP said the use of euro-denominated debt “provides a natural hedge against movements in exchange rates for its portfolio of assets in Ireland”.
"Today's announcement demonstrates further progress in delivering the finance cost saving synergies outlined at the time of the merger with MedicX, successfully reducing the group's average cost of debt since completion in March 2019 by 32 basis points to 3.68 per cent, said Richard Howell, the finance director of Primary Health Properties.
“We will use the funds to progress our disciplined strategy of growing PHP’s portfolio, particularly in Ireland, through the acquisition of well-priced, strategic assets that will provide strong income returns and the potential for asset growth whilst maintaining a prudent level of gearing,” he added.
All-share merger
PHP earlier this year announced an all-share merger with rival MedicX to create a group with almost 480 properties worth a combined £2.3 billion (€2.6 billion). Annual rental income for the combined portfolio is expected to exceed £120 million.
MedicX, formerly owned by UK-based funds management group Octopus, has four primary care schemes currently up and running in the Republic, with a fifth one in Rialto, Dublin 8, due to be completed shortly.
PHP’s Irish assets represent approximately 6 per cent of its total portfolio of 484 properties.
