The UK's third-biggest property group, Liberty International plc, has announced an offer to purchase any outstanding unsecured bonds issued by its wholly-owned subsidiary, Capital Shopping Centres plc (CSC).

It said that since 2000, when CSC had become a wholly owned subsidiary of Liberty International, the company had moved significantly away from its previous strategy of raising debt finance through the unsecured markets.

The corporate credit and senior unsecured bond ratings of CSC began in 1997, when CSC was separately listed on the London Stock Exchange and the company had issued unsecured bonds in 1998 and in 1999.

Of the 350 million sterling of unsecured bonds originally issued, Liberty International had acquired over recent years 252.5 million sterling in aggregate which it did not intend to reissue, Liberty said.

"As of the date of this announcement, 65.3 million sterling of the 5.75 per cent. Bonds due 2009 and 32.2 million sterling of the 6.875 per cent.

Bonds due 2013 remain outstanding compared with the original issue amounts of 150 million sterling and 200 million sterling respectively.

As a result of the above, the Company has agreed with Standard & Poor's (S&P) that its Corporate Rating should now be discontinued and believes that it would be appropriate at this time to provide an opportunity for holders of the Unsecured Bonds to exit through an offer to purchase by private treaty any of the remaining Unsecured Bonds," Liberty added.

It said the offers were being made available to holders of the Unsecured Bonds on the following basis:

• 2009 Bonds: a spread of 1.25 per cent. over 4% Treasury Stock due 2009
• 2013 Bonds: a spread of 1.65 per cent. over 5% Treasury Stock due 2014

"The actual price payable to holders wishing to sell their Unsecured Bonds will be based on the trading level of the relevant Gilt at the time of their transaction with the Company's agent."

Aidan Smith, Finance Director of Liberty International PLC, commented: "The amount of Unsecured Bonds which remain outstanding is now relatively small, both in relation to the size of the original issues and in relation to the group's overall debt.  We believe that it is now appropriate to discontinue CSC's Corporate Rating, but we are offering to purchase the remaining Unsecured Bonds to allow any holders of the Unsecured Bonds to exit their holdings at levels above current market prices should they wish to do so."

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