01 Mar 2012 | 02:17 pm | 1 min. read
International Law firm Pinsent Masons has advised HSBC and Royal Bank of Scotland (RBS) on a comprehensive financing package of £300m for private student accommodation provider Liberty Living. The refinancing consists of a five year term loan of £100m, a five year revolving credit facility of £100m and a US private placement of £100m (US$155m). Liberty Living intends to use the new financing package to refinance existing debt of £200m and to provide £100m for new acquisitions.
Liberty Living is the exclusive brand of Brandeaux Student Accommodation Fund which owns and manages 15,000 beds for university students across 40 residences in 17 UK cities and is the fourth largest private provider of UK student accommodation. The company generated revenues of £71.5m in 2011, producing operating profits of £39.6m.
The deal went to market for US$100m but was upsized due to strong demand from investors, with the placement ultimately 5.5 times oversubscribed. With a wider US private placement investor base than has previously been seen for funding UK student accommodation, the refinancing places Liberty Living in a strong position to expand its student accommodation service in the UK and US markets.
Roger Boyland, Brandeaux’s Chief Executive, said: “The appeal for a UK university degree both from domestic sources and from overseas students remains robust. The demand from university students for purpose-built accommodation looks set to significantly outstrip supply for the foreseeable future and we expect to maintain our very high levels of occupancy and steady annual rental increases well into the future.”
Hugh Taylor, HSBC’s Regional Head of Real Estate, added: “Student accommodation is now an established asset class in its own right. We are pleased to have introduced this asset class to US investors where good pricing has been achieved with debt maturity profiles currently not available in the banking market.”
Stuart Hitchcock, Director in RBS’s Private Placement team, said: “The private placement market has been a strong source of funding for the property sector over the past number of years and Liberty’s debut financing marks an important movement into student accommodation for the investors, particularly those in the US."
The Pinsent Masons team advising on the deal was led by Banking Partner William Oliver and Banking Senior Associate Frances Mallender, assisted by Banking Senior Associates Philip Scott and Stewart Moore and property specialists Sean Houlihan and Katie Ridehalgh. Olswang LLP advised Liberty Living.
Commenting on the deal Banking Partner William Oliver said: “We are delighted to have advised HSBC and RBS on the Liberty Living transaction. The deal demonstrates the confidence which the banks have in Pinsent Masons and the quality of our team as we have developed and grown over recent years.”
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