Regional REIT weighs options as £50m bond deadline approaches
Embattled property fund Regional REIT has confirmed today that it’s looking at whether it should launch a fundraising effort to pay off its £50m debt.
The real estate investment trust has £50m in retail bonds set to mature in August, but fears that it is strapped for cash to pay them off have been rampant for months.
Earlier this month, Peel Hunt analysts James Carswell and Matthew Saperia downgraded the trust from Buy to Hold, warning that “the risks from the high leverage and upcoming maturity cannot be ignored”.
Fears have been stoked as the trust has one of the highest loan-to-value ratios on the market, at 55 per cent. Its share price has fallen 58.9 per cent since the start of the year.
The trust’s stock price slid 28.9 per cent alone this morning on the news.
While the trust had been openly acknowledging that it was actively exploring a range of refinancing options for months, press speculation had begun that the trust may begin an equity capital raise to pull together around £75m.
In response, Regional REIT issued a statement confirming that it was one of the options they were pursuing.
“The company confirms that significant preparatory work has been undertaken to date in respect of both the debt and equity options, which remain under active consideration,” it said in a stock exchange notice.
It added that if it did go ahead with an equity fundraising, it would likely be at a discount to its current share price and would be dependent on shareholder approval.
“The company continues to consider its options and a further announcement will be made when appropriate,” it concluded.
The trust is set to release its full-year results on 26 March.