Hostel group, Safestay, has refinanced its existing borrowings into a single £16m term loan and added a new £2.5m revolving credit facility (RCF) to support its future growth plans.

The new term loan and RCF are for five years and were provided by existing lender, HSBC.

Safestay, which operates an international brand of contemporary hostels, confirmed that the term loan interest rates are £4.4m at 3.96%, £10m at SONIA but capped at 4.75% with a floor of 3% and £1.6m at SONIA – all with an additional margin of 2.6%. The RCF has a rate of SONIA plus a margin of 2.85%.

The term loan is repayable at £100,000 per quarter from March 2025 together with a final payment at completion. Interest on both the Term Loan and RCF is payable quarterly from March this year.

Safestay chairman, Larry Lipman, said: “We are pleased to have completed this refinancing which increases the Group's overall funding capacity providing additional flexibility and enabling additional investment into the development and growth of our business. We are grateful to HSBC who continues to be a long-term and strong supporter of Safestay.”

The term loan also replaces the previous interest only £12.7m facility with HSBC and enables the repayment of the outstanding CBILS loan of £3m, which carried a significantly higher interest rate.

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