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PCTN establishes £26m revolving credit facility

27 March 2015 07:42

Picton has entered into a new three-year £26m revolving credit facility, to provide increased operational and financial flexibility.

The facility provides increased optionality when Picton's 7.25% Zero Dividend Preference Shares (ZDPs) mature in 2016. If the RCF is utilised, and assuming current 3 month LIBOR, it would significantly reduce the overall cost of debt upon the ZDP repayment.

In addition the RCF can provide flexibility in respect of future acquisitions, which is particularly relevant following completion of the recent Placing Programme. By providing the Company with immediate access to undrawn but committed facilities, in future Picton will be able to move quickly and opportunistically to purchase assets, rather than being reliant on raising new equity capital.

The RCF, established with Santander Corporate & Commercial Banking, has a nominal non-utilisation fee of 70 basis points or £0.18 million per annum. Once drawn, the RCF will incur interest payments of 175 basis points over 3 month LIBOR, which is currently equivalent to 2.3% per annum.

If the RCF is used to replace the ZDPs which mature in October 2016, then the Group's interest cost is expected to fall by in excess of £1 million per annum.

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