Titan Europe 2007-1 (NHP) Limited - Irish Stock Exchange

Titan Europe 2007-1 (NHP) Limited Collateral and Structural Term Sheet 1 st May 2007
Libra Loan
• LOAN PURPOSE:
Summary
– Refinancing a healthcare portfolio located throughout the UK: England (72.1% of aggregate market value),
Scotland (17.9% of aggregate market value), Wales (6.8% of aggregate market value) and Northern Ireland
(3.2% of aggregate market value).
• PROPERTIES:
– The portfolio comprises 294 care homes (including two parcels of land adjacent to two care homes) and three
properties providing staff accommodation.
– The majority of care homes in the portfolio (209) were constructed since the 1990s. 235 care homes, including
three properties related to staff accommodation, are purpose-built. The remainder of the care homes includes
38 conversions and 24 part new-build/part conversions.
– The three properties comprising staff accommodation are in the locality of three other care homes and are
three- to five-bedroom houses built between 1974 and 2004.
– The care homes range in size from three- to 150-beds with an average of circa 50 beds. The portfolio
comprises a total of 14,796 registered beds (including 12 beds relating to the staff accommodation), 92.5% of
which are arranged in single rooms and 71.4% of the total number of rooms benefit from ensuite facilities.
• TENANCIES:
– 297 Fully Repairing and Insuring (“FRI”) leases with a weighted average remaining lease term of 20.5 years
(to first break or expiry). There is an agreement in place in respect of 287 Properties such that at expiry of the
relevant lease, such Occupational Lease will be extended to 29 May 2041.
– Portfolio is 5.6% under rented. Rent review provisions across the portfolio fall into three categories: (i) annual
2.5% uplift (281 Properties, 94.3% of Annualised Base Rent); (ii) turnover-based rent in addition to an annual
base rent (7 Properties, 3.9% of Annualised Base Rent) and (iii) RPI-based (6 Properties, 1.9% of Annualised
Base Rent), excluding the three staff accommodation properties.
– Southern Cross Healthcare Group PLC (“Southern Cross”) is the largest tenant operator group, accounting for
86.5% of the Annualised Base Rent of the portfolio. Southern Cross is the UK’s largest provider of care home
services for the elderly (with circa 6% of market share). The Southern Cross leases have an unexpired term of
circa 21.1 years (no break option) and are generally subject to fixed annual uplifts of 2.5%.
– A petition has been presented at Court in Edinburgh by HM Revenue & Customs for the winding up of
Britannia Healthcare Limited, including an application for appointment of a liquidator. Britannia Healthcare
Limited guarantees the leases of its affiliate (Britannia Leased Homes Limited (“BLHL”)) which operates six
freehold Properties in the portfolio, representing in aggregate 1.9% of Annualised Base Rent. At the date of
this document, there is no further information on the status of the petition, other than that it has been
presented, and no order to wind up has been granted (or dismissed) by the Court. The Managing Director of
Britannia Healthcare Limited has made a certified statement, confirming that the amount due to HM Revenue
& Customs (of £51,408.14) has been paid in full in settlement thereof to HM Revenue & Customs.
Notwithstanding the above, in the event of a winding up order and appointment of a liquidator relating to
Britannia Healthcare Limited, the relevant landlord may commence forfeiture proceedings against the relevant
tenant, BLHL. If the landlord regains possession of the property it may re-let the Properties to another tenant.
• RESERVES:
– Upfront cash reserve of £17,476,993.61 (as of 26 th April 2007) available to cover interest shortfalls and satisfy
the minimum ICR covenant of 1.05x (and resulting in a Libra Whole Loan U/W DSCR of 1.00x based on no
principal repayment).
– In order to exercise the Libra Whole Loan extension option at the end of the second year of the loan term, the
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