Grit Real Estate Income Group, the pan-African real estate investor and developer, obtained new loan facilities of $306 million, while streamlining its debt structure.

The sustainability-linked term loan and revolving credit facility (which is the largest real estate transaction to date in sub-Saharan Africa, excluding South Africa) consolidates seven existing loans into a single facility .

A syndication of banks, including Standard Bank of South Africa, ABSA Group and Nedbank Group, participate in the a multi-jurisdictional credit facility, which spans Grit’s assets and credit facilities in Mozambique, Zambia, Ghana and Senegal and a corporate-level revolving credit facility.

The facility is linked to Grit’s carbon reduction and gender equality goals, creating financial incentives to transform assets and provide further enhanced positive impact investments.

As of December 31, 2021, Grit had a total of $409.2 million in outstanding debt, consisting of $362.9 million reported and $46.2 million held within its associates. This new facility replaces $279.1 million of existing debt and secures additional financing for the group’s Club Med Senegal hotel redevelopment project.

The Bank of China’s $76.4 million Zambia facility (which matured earlier this year) is now 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:

  • $66 million of the total facility will be drawn and priced in euros while the remaining balance will be dispersed in US dollars, achieving better synergies with the group’s overall exposures to euro assets.
  • The weighted average facility tenor is 4.3 years, which will cause Grit’s weighted average debt expiration profile to rise to over 3.73 years (from 1.25 years currently).
  • The weighted average interest margin on the base rates increased from 525 basis points (on the replaced debt) to 559 basis points on the new facility. The company said cross-collateralization and the link to sustainability goals have contributed significantly to limiting the rise in Grit’s credit spreads despite significant upward pricing pressure in the broader debt market. high yield in 2022.
  • The group currently has interest rate swaps and collars on notional debt exposures of $100 million that expire after October 2023 and implements additional hedges on a notional amount of $100 million as part of this refinancing, using basis swaps and interest rate collars.

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

Bronwyn Knight, Managing Director, commented:

“Our debt refinancing brings increased scale, diversificationthe optimal duration and financing costs of our overall debt wallet. By refinancing nearly all of our existing debt exposures into a single sustainability-linked facility, we are streamlining our loan management process and reinforcing our commitment to our ESG targets, including carbon reduction and gender equality.

“The cross-collateralization and link to sustainability objectives in the new facility has contributed significantly to limiting increases in Grit’s credit spreads despite significant upward price movements in the broader high yield debt market. in 2022.

“The Standard Bank of South Africa and our other debt financing partners have shown strong support for Grit’s business model and potential and helped us set new benchmarks with today’s landmark sustainability-linked refinance transaction. 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 enables us to deliver smart real estate-focused business solutions and lasting value for our shareholderswhile having a positive impact on the people of Africa.

GR1T: Grit Real Estate secures the refinancing of its debt for 306 million dollars

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