Invesco Property Income Trust (IPIT) has reached an agreement in principle with lender Royal Bank of Scotland to restructure its £217 mln debt burden.

The trust, which breached a banking covenant in September after its interest cover fell below permitted levels, said last week that it has clinched a refinancing agreement envisaging amendments in the maximum permitted loan to value ratio and minimum permitted interest cover ratio. Under the deal, RBS will also take a quasi-equity participation in IPIT on the expiry of the restructured facility or, if earlier, on the refinancing of that facility or disposal of all of the properties currently owned by IPIT's subsidiaries.

IPIT, which is managed by Rory Morrison, said the loan facility is 'not expected to include any pre-determined targets for property sales or prepayment of bank borrowings'.

'In view of the company's current financial condition and the requirement to repay or refinance the company's bank borrowings on or before 28 September 2014, it will be necessary to make changes to the company's investment objective and policy,' IPIT said. As required by the Listing Rules, the proposed changes will be subject to the approval, by ordinary resolution, of shareholders.