United Hampshire US REIT enters interest rate swaps

The fixed rate was lower than expected following the US Fed rate cuts.

United Hampshire US REIT has entered into interest rate swaps to hedge the floating rate of its term loan facilities into fixed rates, the company announced.

The fixed rate of the interest rate swaps was lower than previously assumed, due to the decline in underlying swap rates recently following market volatility and the U.S. Federal Reserve’s interest rates cuts.

It resulted in a reduction in the REIT’s average all-in effective interest rate. The REIT expects this to have a positive impact on its cash flow for 2020 to 2021.

The trust described in its prospectus on 3 March in connection with its initial public offering that it intends to mitigate interest rate volatility on at least 75% of its borrowings.