+ Extension of debt maturities. During the quarter, Prime extended the maturity of its term loan and revolver under its main credit facility (c.34% of total loans) by one year to July 2024. As a result, Prime has no refinancing obligations till July 2024. This gives Prime more time to secure refinancing and some respite amid the credit crunch situation in the US.
+ Gearing decreased 0.9ppts QoQ to 42.8%. 80% of debt is either on fixed rate or hedged (79% in 1Q23), with 63% of debt hedged or fixed through to 2026 or beyond. Prime’s effective interest cost for the quarter increased marginally QoQ from 3.7% to 3.8%, and its interest coverage ratio is at 3.4x. Prime has a buffer of c.5.1% and c.15% from 2022 year-end asset valuations before gearing hits 45% and 50% respectively.
– Portfolio occupancy decreased to 85.6% from 88.6% in 1Q23. The biggest contributors to the decline were 171 17th Street (-14.5ppts QoQ to 80.5%) and Park Towers (-11.4ppts QoQ to 74.3%).