Intu establishes new vehicle for issuing debt

Posted On Thursday, 28 February 2013 06:21 Published by eProp Commercial Property News
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Intu Propertes (ITU) - formerly Capital Shopping Centres (CSO) - has established a new debt funding platform - a special purpose vehicle for issuing investment grade secured debt.

Matthew RobertsThis secured group structure (SGS) will become a central source of financing for the Group‚ it said on Wednesday. The SGS will enable Intu to access the medium and long dated bond and private placement markets on an ongoing basis alongside bank debt‚ thereby diversifying the group’s sources of funds beyond the banking markets and lengthening its maturities.

“We will in 2013 absorb the costs of the launch of the platform‚ principally from early settlement of existing interest rate swap obligations‚” it said. The group will initially use the platform to refinance intu Lakeside‚ intu Braehead‚ intu Watford and intu Victoria Centre. The four centres will be contributed into the SGS which will issue bonds and raise bank debt secured against them.

“These are highly attractive‚ prime‚ wholly owned centres valued at GBP 2.3 billion with annual footfall of around 80 million and retail space of 4.3 million sq ft‚ so the security pool will offer bond investors and lenders a diversified exposure to prime retail assets across the UK‚” it said.

The SGS will‚ subject to market conditions‚ initially borrow approximately GBP 1.15 billion through a benchmark sterling bond issue and bank debt including a bridge facility‚ corresponding to an overall loan to value ratio of around 50 per cent.  The establishment of the SGS therefore will achieve a refinancing and maturity extension on about one third of the group’s debt and over 55% of the group’s debt that is falling due within the next 3-5 years.

The bridge facility is anticipated to be refinanced through further capital markets issues as market conditions allow. The bond roadshow will commence on Monday 4 March and the bank debt‚ which has already been signed‚ will come into effect when the bonds are issued.

Matthew Roberts‚ Finance Director of Intu Properties‚ commented: “We are pleased to announce the establishment of a vehicle for issuing investment grade debt which will become a central financing platform for the Group. This robust and flexible platform diversifies the Group’s sources beyond the banking markets and brings the considerable benefits of ready access to debt markets through an investment grade rating‚ access to longer maturities and ability to issue a range of instruments at competitive margins.

Last modified on Friday, 18 April 2014 12:35

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