Lender grants stay of execution over troubled mall portfolio
After declaring RDI to be in breach of its loan covenants on a portfolio of four UK shoppig centres, Aviva has now granted RDI a standstill agreement until 11 October 2019, under which the lender will not take any action while the borrower organises an orderly disposal of assets.
The malls in question are Grand Arcade,Wigan; Weston Favell, Northampton; Birchwood , Warrington and Byron Place, Seaham. Earlier this month Aviva had the portfolio valued at £152.5m reflecting a net initial yield of 9.7%. This implied a loan-to-value ratio of 89.4% which exceeds the 85% covenant in the loan agreement.
The non-recourse loan has an outstanding balance of £144.7m, a fixed rate of 5.5% per annum and a maturity date in April 2042. RDI pointed out that the fall in valuation was almost entirely die to movements in investment yields. Occupancy (94.5%) and net income across the portfolio have remained broadly stable since 31 August 2018.
