Global Net Lease, Inc. (GNL) CFO Patrick Goulding says the company has a conservative financing strategy and uses leverage where it’s prudent and accretive to earnings. He says the goal is maintain leverage below 50%.
“Our current leverage is below 40%, and what we are designing this to do is to have an investment-grade quality balance sheet, so maintaining leverage certainly below 50% but probably more in the mid-40% range,” Goulding says.
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Ultimately, Goulding says management’s intention is to go to the rating agencies and get a debt rating to enable them to access even more competitive borrowing in the public market. He says the company currently uses a combination of mortgage debt and a line of credit.
“It’s about 35% mortgage debt and 65% line of credit. Our debt is also really focused on the European portfolio because the rates at which we can put debt in place are much more attractive, particularly in the eurozone, but also, we get the benefit, if we use debt in euro or pounds, where we can use it to mitigate our foreign-exchange fluctuation,” Goulding says. “So we’re essentially using it for asset liability matching to enable us to mitigate the foreign-currency risk on both the euro- and pound-denominated investments. Essentially, our strategy at the end of the day is to be 100% hedged to those currency exposures.”
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