The commercial property developer has been approved for £ 300million by the Bank of England’s Covid corporate finance facility
Hammerson API (LON: HMSO) said its lenders have agreed to ease some of their terms for the next 18 months and have increased liquidity, but so far have only received 16% of UK rents for the June quarter .
Coming a few days later the collapse in the administration of rival Intu, the owner of the FTSE 250 mall said his lenders have agreed to relax the unencumbered asset ratio, which is the most stringent clause against lowering the valuation of his properties.
The covenant has been temporarily reduced from 150% to 125% for 18 months and is then set at 140% from October 2021.
Analysts have estimated that Hammerson will now be able to withstand a decline in valuation of around 30% to 34% during the 18-month window of its unencumbered assets such as shopping malls and shopping parks in the UK. United.
In addition to drawing an additional £ 300million from its bank facility, the company has received £ 300million approval from the bank of englandCovid’s corporate finance facility, increasing potential liquidity to £ 1.5bn, including £ 500m in cash.
Hammerson said the relaxation of the commitment “provides additional leeway to allow the company to pursue its strategy, including undertaking cross-portfolio divestitures to strengthen the company’s balance sheet,” although he does so under the direction of a new general manager after David Atkins’ resignation last month.
He added that he “is confident that collection rates will continue to improve significantly in all regions as agreements with brands progress”, when today is the due date. rents for its properties in France and Ireland.
Shares were up 4% to 83.38p on Wednesday morning.
“Rent collection statistics highlight the impact of Covid-19 on retail owners,” Peel Hunt analysts said.
“The relaxed alliance is clearly helpful, but we expect an LTV peak of around 55% which we believe is still too high and dilutive stock issuance remains a real risk. “
Peel Hunt estimated that Hammerson would be able to experience a decline in valuation of around 30% over the 18-month window, while those at Liberum estimated it at almost 34%.