Property development and investment firm, Great Portland Estates (GPE), has signed a new £250m unsecured term loan.

The loan is at a headline margin of 175 basis points over SONIA with three existing relationship banks and has an initial three-year term which may be extended to a maximum of five years at the group’s request, subject to bank consent.

London-based GPE, which lists on the FTSE 250 index on the London Stock Exchange, has put in place an interest rate cap to protect against any further increases in rates while preserving the benefit of any reductions. As a result, more than 90% of the group’s debt is fixed rate or hedged.

Following the financing, the group now has cash and undrawn credit facilities in excess of £470m. GPE has indicated that this liquidity will support the delivery of its strategic priorities, including the funding of a near-term development programme and its £175m private placement debt maturity in May 2024.

Together with the lenders, GPE intends to incorporate ESG-linked KPIs into the loan in due course to align with its existing £450m ESG-linked revolving credit facility. This will enable the group’s performance against these KPIs to affect the future margin payable.

The mandated lead arrangers are NatWest, Lloyds Bank and Bank of China. NatWest acted as documentation agent and Lloyds Bank will act as facility agent.

“We are delighted to have arranged this financing with three key relationship banks,” said corporate finance and tax manager, Holly Reynolds.

“Despite more challenging debt markets, this new loan demonstrates the strong support that we have from our lenders for the clarity and ambition of our business model and our collective belief in the enduring appeal of London to both customers and investors.”

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