In one of the largest refinancing deals of the year, privately-owned national retirement village business Metlifecare has restructured $1.25 billion of debt and established facilities to borrow an extra $650m for development.
Earl Gasparich, chief executive of the formerly NZX-listed company, said the facilities were established with a syndicate whose lead arrangers were ANZ and Westpac.
"We already had support from ANZ and BNZ and now we've got Bank of China, ICBC and Metrics Credit Partners," Gasparich said of the new facilities now in place.
Metlifecare has not previously borrowed from the Bank of China, ICBC and Metrics, he said.
"The debt isn't all drawn yet. As we increase our build rate, we'll draw on that debt," he said.
"It's an expanded syndicate. The New Zealand banks are all there," he said.
Of the $1.25b, $600m is existing debt and $650m is new debt, he said.
Total assets stood at $4.1b as at June 30 "so even if the loan were to be fully drawn and assets don't increase over the next four years - which they will obviously through new development - the loan to value ratio would only be just over 30 per cent", Gasparich told the Herald.
Asked why the company was more than doubling debt when interest rates were rising, he said: "We are increasing our development build rate. We've acquired five new sites already which include sites at Clevedon and Pukekohe. We're also looking at new land to buy in Auckland and the South Island."
Last month, Metlifecare announced it planned to buy six existing villages from the Selwyn Foundation, conditional on Overseas Investment Office, Ministry of Health and statutory supervisor clearances.
Selwyn Park, Selwyn Heights, Selwyn Oaks, Selwyn Wilson Carlile, Selwyn St Andrew's and Selwyn Sprott villages in Whangarei, Auckland, Hamilton, Cambridge and Wellington, as well as the Selwyn Foundation's commercial laundry, are in that deal.
Gasparich said today the extra borrowing facilities would enable Metlifecare to grow.
"We need enough land to have a good-sized land bank to open new villages; we need to have a consistent development build rate; having geographic diversification; having an increased aged-care offering which is something Metlifecare didn't do enough of in the past," he said.
The business aimed to accommodate another 1500 to 2000 residents over the next four years, he said.
The company was established in 1984 and more than 6000 New Zealanders live in its 26 villages in the North Island.
Last year, Swedish investment firm EQT bought the business and delisted the company.
The $1.25b loans are sustainable refinancing and Metlifecare also said today this was the largest refinancing deal of that kind.
Last month, the Herald reported the Reserve Bank has today hiked the official cash rate by 0.25 per cent to 0.75 per cent.
In October, the official cash rate was lifted from a record low 0.25 per cent.
That 25-basis-point hike was the first for the RBNZ in seven years.
The Monetary Policy Committee noted that "further removal of monetary policy stimulus is expected over time given the medium-term outlook for inflation and employment".