PPHE Hotel Group inks major refinancing deal

5th Sep 2024 11:12

(Sharecast News) - PPHE Hotel Group announced a major refinancing agreement with Aareal Bank on Thursday, extending the maturity of its existing loan for its Dutch hotel portfolio and the Holmes Hotel London.

The London-listed firm said the refinancing extended the original loan facility, set to mature in June 2026, to a new maturity date of June 2031.

It said the new facility was divided into two tranches - a €160m tranche for the Dutch hotels and a £16m tranche for the Holmes Hotel in London.

The euro tranche would have an all-in fixed interest rate of 2.765% until June 2026, increasing to 4.49% thereafter until maturity, while the sterling tranche would carry a fixed interest rate of 3.9% until 2026, followed by a competitive floating interest rate.

It compared the new rates to the previous 2.165% for the euro loan and 3.3% for the sterling loan, under the original terms.

The refinancing was backed by financial covenants, based on loan-to-value ratios and debt service requirements.

Independent valuations commissioned by Aareal Bank confirmed the combined market value of the Dutch hotels and Holmes Hotel at €414m, in line with valuations from last December.

The new facility was non-recourse, and secured by existing mortgages over the Dutch properties and Holmes Hotel, providing a strong financial foundation for PPHE as it continued to manage and develop its hotel assets.

"The new facility continues our strong relationship with an existing lender, Aareal Bank," said chief financial officer Daniel Kos.

"It also further confirms the group's attractive and stable asset base in key city-centre locations, enabling the group to secure long term financing at attractive rates, particularly in current market conditions whilst also re-confirming the group's EPRA NRV.

"The company takes a proactive approach to its debt financing and this refinancing takes advantage of the inverted interest curve at the point of original maturity whilst also benefiting from a low margin over a longer period of time."

At 1036 BST, shares in PPHE Hotel Group were down 1.88% at 1,251.06p.

Reporting by Josh White for Sharecast.com.