REG - Grit Real Estate Inc - Debt refinancing & syndication for up to US$306m

Grit Real Estate IncomeAnnouncement

19/10/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221019:nRSS3301Da&default-theme=true

RNS Number : 3301D  Grit Real Estate Income Group  19 October 2022

 GRIT REAL ESTATE INCOME GROUP LIMITED

 (Registered in Guernsey)

 (Registration number: 68739)

 LSE share code: GR1T

 SEM share code: DEL.N0000

 ISIN: GG00BMDHST63

 LEI: 21380084LCGHJRS8CN05

 ("Grit" or the "Company" and, together with its subsidiaries, the "Group")

 

 

ENTERING INTO BINDING REFINANCING AGREEMENTS AND SYNDICATION FOR UP TO US$306
MILLION

LARGEST SUSTAINABILITY LINKED REAL ESTATE DEBT REFINANCING AND SYNDICATION IN
SUB-SAHARAN AFRICA (EXCLUDING SOUTH AFRICA)

 

 

The board of Directors (the "Board") of Grit Real Estate Income Group Limited,
a leading and award-winning pan-African impact real estate company focused on
investing in, developing and actively managing a diversified portfolio of
assets underpinned by predominantly US$ and Euro denominated long-term leases
with high quality multi-national tenants, is today pleased to announce the
signing of binding agreements for the Group's sustainability-linked debt
refinancing and syndication.

 

The sustainability-linked term loan and revolving credit facility is for up to
US$306 million, making it the largest real estate sector transaction to date
in Sub-Saharan Africa (excluding South Africa). Standard Bank of South Africa
acted as sole lead arranger and bookrunner for the multi-jurisdictional debt
syndication covering Grit's assets and debt facilities in Mozambique, Zambia,
Ghana and Senegal and a corporate level revolving credit facility.

 

The refinancing ensures Grit's debt structures have longer tenors and are more
efficient, flexible and optimally priced. Seven existing debt exposures are
being consolidated into the single sustainability-linked cross-collateralised
facility, streamlining Grit's loan management process, and creating scalable
solutions for the future. The facility is linked to Grit's carbon emission
reduction and gender equality targets, creating financial incentives to
transform assets and to deliver further enhanced positive impact investments.

 

As at 31 December 2021, the Group had a total of US$409.2 million in
outstanding debt, made up of US$362.9 million reported and US$46.2 million
held within its associates. This facility replaces US$279.1 million of
existing debt and secures additional funding earmarked for the Club Med
Senegal redevelopment project.

 

The refinancing has enjoyed strong support from Grit's existing senior
lenders, including Standard Bank, ABSA Group and Nedbank Group, who have
upsized their participation in the syndication and replaced the Bank of
China's US$76.4 million Zambian facility (as at 31 December 2021), which is
now being fully repaid.

 

The binding transaction is subject to final regulatory approvals and is
expected to be implemented by the end of October 2022. Further details
include:

·     US$66 million of the total facility will be drawn and priced in
Euros while the remaining balance dispersed in USD, achieving better matching
of the Group's overall Euro asset exposures.

·    The weighted average facility tenor is 4.3 years, and in conjunction
with other executed Group debt refinancing, will result in an increase to
Grit's weighted average debt expiry profile to over 3.73 years (from 1.25
years currently) at implementation date.

·     The weighted average interest spread over base rates has increased
from 525bps (on replaced debt) to 559bps on the new facility. The
cross-collateralisation and link to sustainability targets meaningfully
contributed to limiting Grit's increase in credit spreads despite material
upward pricing pressure in the broader high yield debt market in 2022.

·     The Group currently has interest rate swaps and collars over
notional debt exposures of US$100 million that expire after October 2023 and
is implementing additional hedges over US$100 million notional as part of this
refinance, utilising basis swaps and interest rate collars.

 

Excluded from the syndication are debt maturities on the State Bank of
Mauritius facilities totaling US$57.0 million (which have already been
extended to 31 March 2025), AnfaPlace Mall debt (which has also been extended
to March 2025) and the Kenyan asset facilities, which are to be separately
refinanced.

 

Bronwyn Knight, CEO of Grit Real Estate Income Group Limited, commented:

"Our debt refinance brings enhanced scale, diversification, tenor, and optimal
funding costs to our broader debt portfolio. By refinancing almost all our
existing debt exposures into a single sustainability-linked facility, we are
streamlining our loan management process and bolstering our commitment to our
ESG targets, including carbon emission reduction and gender equality.

 

The cross-collateralisation and link to sustainability targets in the new
facility meaningfully contributed to limiting Grit's increases in credit
spreads despite material upward pricing movements in the broader high yield
debt market in 2022.

 

Standard Bank of South Africa and our other debt financing partners have shown
strong support for the Grit business model and potential and have assisted us
in setting new benchmarks with today's landmark sustainability-linked
refinance transaction, the largest of its kind for the real estate sector in
sub-Saharan Africa (excluding South Africa).

 

Grit's family of strong partnerships across the African continent enable us to
deliver smart real estate focused business solutions and sustainable value for
our shareholders, whilst also delivering positive impact to the people of
Africa."

 

Niyi Adeleye, Standard Bank's Head of Real Estate Finance for the Africa
Region

"We are pleased to lead and structure Grit's sustainability-linked syndicated
debt facility, underlining our support and confidence of Grit's compelling
business and growth strategy and potential. This further diversifies Grit's
funding by providing access to attractively priced, efficient and flexible
debt facilities, which also increases the average maturity of Grit's debt,
whilst creating scale in the financing of African real estate and balancing
risk profiles."

 

By Order of the Board

 

19 October 2022

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU no.
596/2014) (as amended) as it forms part of UK domestic law by virtue of the
European union (withdrawal) act 2018 and other implementing measures. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 Grit Real Estate Income Group Limited
 Bronwyn Knight, Chief Executive Officer                           +230 269 7090
 Darren Veenhuis, Investor Relations                               +44 779 512 3402

 H/Advisors Maitland - Communications Advisor
 James Benjamin                                                    +44 7747 113 930 / +44 20 7379 5151
 Alistair de Kare-Silver                                           Grit-maitland@h-advisors.global

 finnCap Ltd - UK Financial Adviser
 William Marle/Teddy Whiley (Corporate Finance)                    +44 20 7220 5000
 Mark Whitfeld/Pauline Tribe (Sales)                               +44 20 3772 4697
 Monica Tepes (Research)                                           +44 20 3772 4698

 Perigeum Capital Ltd - SEM Authorised Representative and Sponsor
 Shamin A. Sookia                                                  +230 402 0894
 Kesaven Moothoosamy                                               +230 402 0898

 Capital Markets Brokers Ltd - Mauritian Sponsoring Broker
 Elodie Lan Hun Kuen                                               +230 402 0280

 

NOTES:

Grit Real Estate Income Group Limited is the leading pan-African woman led
real estate company focused on investing in, developing and actively managing
a diversified portfolio of assets in carefully selected African countries
(excluding South Africa). These high-quality assets are underpinned by
predominantly US$ and Euro denominated long-term leases with a wide range of
blue-chip multi-national tenant covenants across a diverse range of robust
property sectors.

 

The Company is committed to delivering strong and sustainable income for
shareholders, with the potential for income and capital growth.

 

The Company holds its primary listing on the Main Market of the London Stock
Exchange (LSE: GR1T) and a secondary listing on the Stock Exchange of
Mauritius (SEM: DEL.N0000).

 

Further information on the Company is available at http://grit.group/
(http://grit.group/)

 

Directors: Peter Todd+ (Chairman), Bronwyn Knight (Chief Executive Officer)*,
Leon van de Moortele (Chief Financial Officer)*, David Love+, Sir Samuel Esson
Jonah+, Nomzamo Radebe, Catherine McIlraith+, Jonathan Crichton+, Cross
Kgosidiile and Bright Laaka (Permanent Alternate Director to Nomzamo Radebe).

(* Executive Director) (+ independent Non-Executive Director)

 

Company secretary: Intercontinental Fund Services Limited

Registered address: PO Box 186, Royal Chambers, St Julian's Avenue, St Peter
Port, Guernsey GY1 4HP

Registrar and transfer agent (Mauritius): Intercontinental Secretarial
Services Limited

UK Transfer secretary: Link Asset Services Limited

SEM authorised representative and sponsor: Perigeum Capital Ltd

Mauritian sponsoring broker: Capital Markets Brokers Ltd

 

This notice is issued pursuant to the FCA Listing Rules and SEM Listing Rule
15.24 and the Mauritian Securities Act 2005.  The Board of the Company
accepts full responsibility for the accuracy of the information contained in
this communiqué.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCEAEEPFFXAFAA