Sharechat Logo

Summerset Group completes $600 million syndicated loan facility refinance

Friday 31st March 2017

Text too small?

Summerset Group expands funding lines with a new $600 million syndicated loan facility refinance to pay for development projects in existing and future retirement villages as a housing boom continues and an ageing population grows. 
 
 
The facility is an increase from $450 million syndicated loan facility that was previously in place. According to Summerset, it currently has $283 million of debt, or 47 percent of the $600 million, "leaving substantive headroom for future development or unexpected economic cycle events."
 
 
New Zealand retirement village operators are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in the country's post-war era reach the target age for operators. The village owners do not buy and sell the units but sell the right to occupy. When a resident vacates the unit they receive their original investment back less a management fee. The owner can then resell the unit for the current market value, effectively receiving all of the capital gain and the management fee. 
 
 
Chief executive Julian Cook said Summerset continues to receive strong support from financial institutions. “We adopt a prudent approach to debt levels and having conservative levels of headroom puts us in good shape for continued development, and also in the event of a property downturn," he said.
 
 
The loan facility syndicate comprises ANZ Bank New Zealand, Bank of New Zealand and ASB Bank and the syndicated loan facility comprises tranches which are a mix of 3.4 and five years, with 37.5 percent maturing in August 2020 and 62.5 percent maturing in March 2022. The facility is intended to be used for funding development projects.
 
 
The gearing ratio for the group at its balance date on Dec. 31, 2016 was 32.7 percent, down from 37.1 percent a year earlier.
 
 
The shares slipped 0.4 percent to $5.20. 
 
 
(BusinessDesk)

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar sags after avalanche of data and central bank action
Fonterra board starts planning chair succession
Fulton Hogan keeps Australian civil construction unit
Time for congestion pricing has come - NZIER
Colliers defends KiwiBuild as 'far from a colossal failure'
Pushpay shares rise as cost-cutting upgrades earnings guidance
20th September 2019 Morning Report
NZ dollar weaker against British pound on EC president's Brexit optimism
Todd plans Kapuni drilling campaign
MARKET CLOSE: NZ shares gain; appetite for KFC helps Restaurant Brands hit record

IRG See IRG research reports