Hostel owner-operator Safestay has refinanced its existing borrowings into a single £16 million term loan and added a new £2.5 million revolving credit facility (RCF) to support future growth plans.
The loan and RCF are for 5 years and were provided by existing lender HSBC.
The loan interest rates are £4.4 million at 3.955 per cent, £10 million at SONIA but capped at 4.75 per cent with a floor of 3 per cent and £1.6 million at SONIA, all with an additional margin of 2.6 per cent. The RCF has a rate of SONIA plus a margin of 2.85 per cent. The loan is repayable at £0.1 million per quarter from March 2025 together with a final payment at completion. Interest on both the Term Loan and RCF is payable quarterly from March 2024.
The loan replaces the previous interest only £12,745,000 facility with HSBC and enables the repayment of the outstanding CBILS loan of £3 million which carried a significantly higher interest rate.
What they said
Larry Lipman, chairman of Safestay, said: "We are pleased to have completed this refinancing which increases the Group's overall funding capacity providing additional flexibility and enabling additional investment into the development and growth of our business. We are grateful to HSBC who continues to be a long-term and strong supporter of Safestay."