Primary care REIT MedicX has successfully refinanced £233.7m of existing Aviva loan facilities, increasing them by £30.8m.

The refinancing, conducted without incurring break fees, combined 46 tranches across 20 legacy loan agreements into two tranches under one agreement.

The new loan facility consists of a £30.8m ten-year interest only tranche with a fixed interest rate of 3.05% per annum, together with a £233.7m 15-year partially amortising tranche with a fixed interest rate of 4.69% per annum (equal to the blended current cost of the existing facilities).

MedicX says it benefits from resetting the Loan to Value covenant on the legacy restructured debt portfolio to 65%, enabling the release of £72m of charged property collateral – £47m of which has been applied to increase the loan facility.

The remaining £25m includes eight properties released from charge, giving the investor the flexibility to carry out asset management projects at the locations, as well as increasing unencumbered collateral to negotiate future facilities at current market rates.

To improve efficiency, MedicX will rationalise part of its group structure with the removal of six subsidiaries which no longer own investment property.

Following the refinancing, the Group’s adjusted gearing will increase marginally to 53.3% (June 2018: 52.5%) and the weighted average unexpired term of debt will increase from 11.0 to 11.7 years. The Group’s weighted average cost of debt remains almost unchanged at 4.26%, from 4.25% at 30 June 2018.

Helen Mahy, chairman (pictured), said: ‘We are delighted to have agreed a refinancing with our long-term funding partner Aviva Investors. The new arrangements will improve operational efficiency and free up property collateral, enabling MedicX to negotiate new facilities at competitive rates which should reduce MedicX’s average cost of debt.’