The British Land Company PLC has announced plans for a refinancing of its existing superstore portfolio (BLSSP) which is securitised through Werretown Supermarkets Securitisations plc. BLSSP will be refinanced by a new simplified securitisation issued by BL Superstores Finance PLC, a wholly owned subsidiary of British Land.
The proposed refinancing, which unlocks value for both British Land and existing bondholders, is expected to amount to £750 million and includes £52 million in new floating rate bonds. The new financing is expected to have a weighted average interest rate of approximately 4.9%.
The refinancing follows on from the success of, and positive investor reception for, the similar exercise carried out in March 2005 on British Land's £2 billion Broadgate securitisation.
- Group interest costs reduced by £7 million per annum
- Group weighted average cost of debt reduced from 5.87% to 5.70%
- Financing costs of BLSSP reduced from 6.75% to 4.93%
- Pre-tax exceptional charge of £104 million mainly due to difference between the redemption value and book/nominal value of existing debt
- Adjusted NAV reduced by 14 pence per share; NNNAV virtually unchanged
- The new simplified structure will provide significant rating improvements for existing bondholders
Commenting on the Proposed Transaction, Graham Roberts, Finance Director of British Land, said: "This major refinancing of the Sainsbury's portfolio continues our investor friendly positioning, unlocking significant additional value for bondholders and British Land. Bondholders will benefit from a simplified structure and significant rating improvements; for shareholders there is improved financing flexibility and reduced interest charges going forward. The Proposals have been approved by a Special Committee of the ABI representing 34% of the existing fixed rate bonds."
Source: British Land