Norwegian Property has accepted offer and terms for new credit facilities totalling NOK 9 960 million.
The total credit amount is split into two main credit facilities of identical size:

Main credit facility 1: NOK 4 980 million offered by Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB with equal amounts. This facility has a duration of 7 years. Both the borrower and the lenders may request an adjustment of margins after 2 years.

Main credit facility 2: NOK 4 980 million offered by DnB NOR Bank ASA and Fokus Bank, the Norwegian branch of Danske Bank AS with equal amounts. This facility has duration of 4 years with a fixed borrowing margin for the duration of the facility.

Average margin for the two facilities is 1.25 per cent.

"We are pleased to have a long-term financing solution for Norwegian Property in place, enabling freedom of action and investment capacity", says CEO Olav Line in a comment.  "New credit facilities of NOK 10 billion in total secure a solid financial platform and a diversified maturity profile for the company's debt. After the refinancing Norwegian Property has no maturing debt until 2013," Olav Line continues.

Average duration for Norwegian Property's debt increases to 5.3 years, from 2.0 years as of 31 December 2010. Norwegian Property now has no maturing debt before 2013.

Available credit facilities and cash amount to NOK 1.3 billion after the refinancing. In addition, Norwegian Property will in 2012 and 2015 receive repayment of the vendor financing totalling NOK 0.6 billion granted to the buyers of Norgani Hotels.

On a pro forma basis the average interest for Norwegian Property will increase marginally from 5.16 per cent p.a. as of 31 December 2010 to 5.3 per cent p.a. as of 30 June 2011. The borrowing margin increases from 0.74 per cent as of 31 December 2010 to 1.1 per cent as of 30 June 2011, but expiry of previous interest hedges has a positive effect on the average interest.

Both main facilities are structured based on an invitation term sheet from Norwegian Property. The invitation was prepared in order to secure long term flexibility, investment capacity and favourable commercial terms. The new facilities secure refinancing of all loan maturities in 2011 and 2012 and also add funding capacity for future investments:

NOK 7 500 million secures an immediate refinancing of the existing syndicated loan.

NOK 1 344 million secures the refinancing of the bonds in the Norwegian capital market maturing in March 2012.

NOK 1 116 million is established as revolving credit facilities available for future investments and general corporate purposes.

As long as Norwegian Property's Loan to Value (LTV) is within or below the long term financial targets of 55 to 65 per cent, the facilities will have limited amortisations:
 
No annual amortisations if LTV is below 60 per cent
Annual amortizations of 0.5 per cent of the debt if LTV is in the range of 60 to 65 per cent
Gradual step up on amortisations (1.0 per cent, 2.0 per cent and 3.0 per cent) if LTV is in the range of 65 to 80 per cent.

Financial covenants are established to secure flexibility:

Loan to Value of less than 80 per cent
Interest cover ratio of minimum 1.4.

Other terms are mainly in line with the existing syndicated facility and include change of control clause, interest rate hedging of minimum 60 per cent and security in the form of pledge in a predefined portfolio of properties.

The first draw-downs on the new facilities are expected in June 2011 and are subject to finalisation of a credit facility and fulfilment of conditions precedent relating to the draw down. Norwegian Property will charge a one-off expense of NOK 20 million relating to previously accrued establishment fees relating to the refinanced debt.
 
 

For additional information, please contact:

Svein Hov Skjelle, CFO, tel +47 930 55 566, shs@npro.no
Elise Heidenreich-Andersen, Director IR, tel. +47 951 41 147, eha@npro.no

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)