British Land completes Broadgate refinancing (UK)

The British Land Company PLC has completed the £2.1 billion refinancing of the Broadgate Estate. As a result of this transaction, Broadgate Financing PLC, a ring fenced subsidiary of British Land, has issued £2.080 billion of bonds at an average interest rate of 5.05%. The weighted average maturity of the new bonds is 20 years.

After repayment of existing debt previously securitised on the Estate, the costs of
closing out hedging arrangements and payment of transaction costs, the net additional
amount of financing raised from the transaction is approximately £500 million. British
Land’s future interest charges will be reduced by approximately £13 million per year.
Tighter pricing of the bonds has resulted in a £1 million greater annual interest saving
compared with the indicative amount announced on 21 January 2005.

The transaction will result in British Land incurring an exceptional accounting charge
against pre-tax profits in the second half of its financial year ending 31 March 2005 of
some £180 million mainly due to the difference between the redemption value and
book/nominal value of its existing Broadgate debt. After taxation, the impact on British
Land’s NNNAV, “triple net” asset value, that is broadly NAV less the FRS13 disclosure
and less contingent capital gains, is a reduction of less than 3p per share. NAV will be
reduced by 24p per share.

Commenting on the issue Nick Ritblat, a director of British Land, said: “This major refinancing of the Broadgate Estate through the issue of over £2 billion of bonds has raised additional long term funding for British Land. The financing secures the entire Broadgate Estate in a single enlarged securitisation structure with improved prepayment provisions and sufficient flexibility to address British Land’s current
business needs. The transaction reduces British Land’s interest charge going forward and extends the maturity of its borrowings whilst significantly improving the free asset ratio.”

Source: British Land

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