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LGV’s Craegmoor Healthcare completes GBP255m refinancing

Craegmoor Healthcare Group, a provider of long-term specialist care owned by Legal & General Ventures, has refinanced its whole business securitisation with a GBP255m bank facility arr

Craegmoor Healthcare Group, a provider of long-term specialist care owned by Legal & General Ventures, has refinanced its whole business securitisation with a GBP255m bank facility arranged by Bank of Scotland.

As part of the refinancing, the second since Legal & General acquired the company in 2001, it fully redeemed all outstanding notes of Craegmoor Funding No. 2, the securitisation financing vehicle, including an agreed early redemption premium.

According to Craegmoor, the signing of the new facility provides it with a strong capital base, substantially reducing its ongoing debt service obligations and giving it the financial and operational flexibility to move to the next stage of its development. Rothschild acted as lead financial adviser on the transaction.

The refinancing was successfully completed in spite of turbulent debt market conditions, reflecting, according to Craegmoor, factors such as its strong operating performance, a diversified and substantially freehold property portfolio comprising 234 homes.

The ability of the group to conduct the refinancing was also influenced by the attractive growth prospects for Craegmoor in a growing long-term specialist care market, the defensive nature of this specialist market and predictable cash flows, the strength and experience of Craegmoor’s management team and the standard of the clinical governance, IT and human resources systems underpinning the delivery of care.

‘This is a highly significant milestone for Craegmoor and illustrates the tremendous amount of progress that has been achieved in recent years,’ says chief executive Ted Smith. ‘As well as improving the quality of our estate, we have invested heavily in improving our clinical governance and HR as well as in training programmes for our 6,700 employees.

‘There are a number of exciting opportunities to grow the business both organically and through acquisition and the refinancing is an ideal platform from which to strengthen our position as the leading providing or specialist care.’

Craegmoor is the largest independent provider of long term specialist care in the UK with a turnover of about GBP170m in 2006. Its portfolio comprises specialist and nursing care homes, mental hospitals, specialist adult colleges and supported living schemes. The group has more than 4,700 beds, comprising 2,229 specialist beds including 143 beds in three colleges, 2,242 older people beds and 237 in independent hospitals.

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