ING UK Real Estate Income Trust is seeking to amend several of the covenants in its securitised loan facility.

The company, one of the nine Guernsey-listed property income trusts, has called a meeting of the noteholders of the securitised facility on 18 March to vote on the amendments.

It said that implementation of the amendments together with initiatives already undertaken, such as repaying debt and cutting the dividend, would strengthen its ability to withstand market conditions.

The amendments are to:

  • increase the loan-to-value covenant from 50% to 60% until January 2012, when it will reduce to 55%, falling back to 50% in July 2012;
  • increase the interest-cover ratio from 1.5 times to 1.75 times until maturity of the securitised loan facility in January 2013;
  • increase the loan-to-value ratio at which level cash (other than rent) can be released from the securitised structure and passed to the company from 35% to 50%; - reduce the company's flexibility to make non-core investments, residential investments and undertake developments or major upgrade projects within the securitised loan facility;
  • remove the company's ability to hold indirect property investments within the securitised loan facility for the purpose of the various financial covenants.

Rating agencies, Standard & Poor's and Fitch, have both confirmed that the 'AAA' rating of the notes will be maintained if the covenants are amended.

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