Target Healthcare REIT has entered into a new long-term £50 million committed term loan facility with life insurer ReAssure.

The facility has been used to repay Target Healthcare REIT’s existing £40 million term loan with First Commercial Bank, which was due for repayment in August 2022, and provides an additional £10 million of capital (prior to costs) for new investment opportunities.

The facility carries an aggregate fixed rate of interest of 3.28% per annum for its 12-year term, maturing in January 2032.

Target Healthcare’s total borrowing capacity now stands at £180 million when this new facility is combined with its existing term loan facilities with The Royal Bank of Scotland and HSBC.

Target Healthcare has a £50 million committed term loan with The Royal Bank of Scotland which has a revolving credit facility, repayable on 1 September 2021.

Target Healthcare’s term loan with HSBC has an £80 million revolving credit facility, repayable on 29 January 2021.

The group’s weighted average cost on its drawn debt, inclusive of amortisation of arrangement costs, is 3.07%.

Gordon Bland, finance director of Target Fund Managers, said: “Securing this institutional long-term debt funding for the group fits with our stated strategy to source and effectively use modest leverage, with the facility’s 12-year duration and attractive fixed rate of interest supporting the group’s objective to provide sustainable long-term returns to shareholders.”

He added: “The backing from an institutional lender is a strong endorsement of the investment strategy to build a diverse portfolio of modern, purpose-built care homes, which are best-placed to serve their local markets.”