On March 22, 2005, Redevco UK has completed the Â£325 million securitisation of the majority of its UK real estate portfolio at a lower cost of funds than could have been achieved through its traditional debt funding sources. Morgan Stanley was sole lead manager for the securitisation.
As a result of this transaction, Redevco Original Commercial Securitisation PLC, a ring fenced special purpose company has issued Â£325 million of bonds at a weighted average spread to Libor of less than 0.15%, the proceeds of which will be on-lent to the Redevco group. The weighted average maturity of the bonds is 7.6 years with a loan-to-value ratio of 60.8%.
The securitised property portfolio consists of 53 investment properties valued at Â£535 million located throughout the UK. The properties are predominantly high street retail, with some office and shopping centre units, with 108 occupational leases to 74 different tenants.
Commenting on the issue Chris Ward, Finance Director of Redevco UK, said:
âWe are delighted with the success of the transaction. Morgan Stanley helped us achieve bonds priced at the tightest level ever achieved for a sterling CMBS deal, which for us as a new entrant to the market was particularly pleasing. Investor demand was very strong reflecting the quality of the portfolio we have built up and the quality of our property management expertise. The funds raised will enable us to further grow the Redevco business and take the group to the next stage of its development.â