Grit Real Estate, a London Stock Exchange listed property company, has announced that it has received a loan from Standard Bank as Grit expands across Africa.
The sustainability-linked term loan and revolving credit facility, for up to US$306m, is the largest of its kind to date for sub-Saharan Africa’s real estate sector, excluding South Africa.
“Standard Bank has successfully syndicated a multi-million US dollar sustainability-linked debt refinancing facility for London Stock Exchange and Stock Exchange of Mauritius listed pan-African impact real estate investment and management company, Grit Real Estate Income Group,” Grit said.
The facility is aligned to Grit’s environmental, social and governance (ESG) goals. The transaction will increase the company’s weighted debt expiry term from 1.25 years to more than 3.73 years at a group level.
Standard Bank acted as the sole mandated lead arranger and bookrunner for the transaction which covers Grit’s assets and debt facilities in Mauritius, Mozambique, Zambia, Ghana, and Senegal. The facility is structured across different jurisdictions and ensures Grit’s debt structures will have a longer tenor and be better priced than before.
“The facility also helps to create pathways to transform assets and lending structures to support Grit’s ambitious sustainability targets, ensuring Grit’s ability to scale and diversify funding structures and creating a template structure that could be implemented across the rest of Grit’s portfolio,” the company said.
Niyi Adeleye, Standard Bank’s Head of Real Estate Finance for the Africa Region said the loan facility diversified Grit’s funding by providing access to attractively priced, efficient and flexible debt facilities, which also increased the average maturity of Grit’s debt while creating scale in the financing of African real estate and balanced its risk profile.
“Sustainability-linked loans are a mechanism to encourage clients to strengthen their resilience and adaptive capacity to climate change risks and social challenges by adopting sustainable solutions for their businesses. As a bank committed to Africa and her people, this is an important step in the continent’s transition toward sustainable business practices,” said Adeleye.
Simon Gouweloos, Standard Bank’s deal lead and head of real estate Finance for south and central Africa said Standard Bank previously led the successful $140m syndication of Grit’s Mozambique facilities in October 2019.
“Our debt refinance brings enhanced scale, diversification, tenor, and optimal funding costs to our broader debt portfolio. By refinancing almost all our existing debt exposures into a single sustainability-linked facility, we are streamlining our loan management process and bolstering our commitment to our ESG targets, including carbon emission reduction and gender equality,” said Bronwyn Knight, Grit CEO.
Grit will have the base rate associated with $200m of notional lending hedged or fixed, thus limiting future interest rate rise risks. Grit owns numerous offices across Africa.