Civitas Social Housing has agreed a new £84.5m loan facility with M&G to help it acquire more properties.
The listed real estate investment trust (REIT) secured the seven-year facility at a price of 2.75% above a fixed rate set by reference to the LIBOR swap rate of the loan term.
In a stock exchange announcement, the FTSE 250 firm said it will use the funds this year to “enable the purchase of high-quality properties that form part of the pipeline of new transactions”.
It added: “This in turn is expected to further enhance both rental income and in due course dividend cover.”
M&G is a new lender to Civitas and the facility will increase Civitas’ loan to value to 34.6 per cent, the REIT said.
Last year Civitas extended an existing £100m debt facility it has with HSBC to November 2022.
The REIT currently has 619 properties, which house 4,295 people, according to its website. At its half-year results last November, Civitas said it had identified a £180m pipeline.