23 November 2017

THE UNITE GROUP PLC

("Unite Students", "Unite", the "Group", or the "Company")

INVESTMENT GRADE RATING AND NEW DEBT FACILITIES

Unite Group plc, the UK's largest provider of student accommodation, is pleased to announce that it has secured an investment grade credit rating and arranged a new five year unsecured debt facility providing Unite Students with reduced financing costs, a greater level of flexibility and ability to diversify sources of funds to support ongoing growth.

The new £500 million unsecured debt facility provides additional financing headroom for the development pipeline and greater financial flexibility. The new facilities will increase the debt maturity by 12 months, and with an initial margin of 145bp, will reduce the average cost of debt, when fully drawn, to 3.9% from the current level of 4.2%. 

The Group is also pleased to announce that it has been assigned an investment grade corporate rating of BBB from Standard & Poor's and Baa2 from Moody's reflecting the strength of Unite's capital position, cash flows and track record.

The new loan facilities comprise a five year £350 million revolving credit facility and a one year £150 million bridge loan, replacing a £280 million secured debt facility. The Group intends to replace the bridge loan during the first half of 2018 with longer term unsecured debt to further extend our maturity profile and diversify our sources of finance.

As part of the transaction, interest rate swaps with a notional principal of £220 million have been cancelled at a cost of £9.5 million. These swaps had a carrying value of £10.0 million as at 30 June 2017. This will result in a saving of £1.8 million per annum. We will continue to fix interest rates on the majority of investment debt going forward.

The syndicate for the new facilities consists of HSBC Bank plc and The Royal Bank of Scotland plc. Rothschild & Co acted as rating advisor to Unite.

Joe Lister, Chief Financial Officer of Unite Group plc commented:

"I am excited that we have taken this step to a rated, unsecured debt structure. The rating demonstrates the robustness of our business and the new facility will support the delivery of our existing strategy. The reduction in the cost of debt will contribute to the earnings growth trajectory over the next few years."

Andy Armstrong, Head of Real Estate, UK, Europe and Middle East at HSBC said:

"HSBC is delighted to continue its long term relationship with Unite. The move to a rated unsecured debt structure is a key step for Unite as it delivers on its strategy."

Paul Coates, MD, Real Estate Finance for the Royal Bank of Scotland said:

"RBS has supported Unite for more than 20 years and we are pleased to continue backing them with this new debt facility. Unite's achievement of an investment grade rating is an important development for the Group as well as the wider purpose built student accommodation market as it continues its growth into an established asset class."

-ENDS-

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Notes to editors:

About Unite Students

Unite Students is the UK's largest and most established manager and developer of purpose-built student accommodation. It provides a home for around 50,000 students, in more than 140 properties, across 28 leading university cities in England and Scotland. Unite works in partnership with more than 60 Higher Education institutions and also lets rooms directly to students.

Unite's purpose is to provide a home to its culturally diverse customers, offering them a strong foundation for academic and personal success. The accommodation is high quality, safe and close to university campuses, transport links and local amenities. Students live in ensuite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning of communal kitchens and bathrooms and high-speed Wi-Fi.

Founded in 1991 in Bristol, the Unite Group plc is a FTSE250 company, listed on the London Stock Exchange, employing more than 1,250 people. It pursues a sustainable growth strategy, designed to make the most of the resilient nature of the student accommodation sector. Unite is focused on maintaining its position as the leading provider of student accommodation in the UK, by having the best brand, operating the highest quality portfolio and maintaining the strongest capital structure in the sector. This is achieved with consistent investment in, and improvement to, the operating platform; highly selective development activity and asset management initiatives.

Unite is invested in and operates a two specialist funds and joint ventures with institutional investment partners, the £2 billion Unite UK Student Accommodation Fund (USAF) and the £1 billion London Student Accommodation Vehicle (LSAV).

Unite is the founder and major donor of the Unite Foundation. The Foundation provides 160 young people in the UK who lack family support with free student accommodation and financial support.

For more information, you can visit Unite's corporate website www.unite-group.co.uk, the student site www.unite-students.com or the Unite Foundation www.unitefoundation.co.uk.