Mall Fund Refinancing

RNS Number : 4339N

Capital & Regional plc

10 June 2010

 

10 June 2010

                                                    CAPITAL & REGIONAL PLC:

                                                 Mall Fund Refinancing

Capital & Regional, the co-investing property asset manager, is today announcing details of the Consent Solicitation Process which was launched today to restructure the Mall Fund Secured Floating Rate Notes due 2014 (the "Notes"). Capital & Regional owns 16.7% of the Fund and acts as Property and Asset Manager.

The Notes were issued by a special purpose vehicle, The Mall Funding PLC, and they mature in April 2014. The outstanding principal of the Notes currently amounts to £1,076.9 million. There is an Inter-Company Loan from Mall Funding PLC to the Mall Limited Partnership in the same amount which matures in April 2012.

The Mall Fund has been in negotiations with an Ad Hoc Committee of Noteholders, who together hold or control approximately 45% of the Notes. The members of the Ad Hoc Committee have confirmed that they are supportive of the proposals.

The key elements of the proposed restructuring are as follows:

·    An extension of the maturity date of the Inter-Company Loan by three years to 2015 and the legal maturity of the Notes to 2017.

·    A cash contribution of £155 million from retained cash held in the Partnership Account, of which £50 million will be applied on closing to the prepayment of the Inter-Company Loan and £85 million to fund leasing incentives, capital expenditure, working capital reserves, and with the balance covering swap breakage costs, consent solicitation fees,  various costs of the transaction and contingencies.

·    An increase in the margin payable to Noteholders from 0.18% to 0.68% from April 2011.

·    Mandatory amortisation requiring that the Inter-Company Loan is reduced to an amount equal to or less than £800 million by December 2012 and £600 million by December 2014.

·    The LTV covenant (defined as outstanding debt divided by gross property value) will be tested from December 2011 and will require that the LTV is equal to or less than:
i)     83% in December 2011
ii)    77% in December 2012
iii)   71% in December 2013
iv)   65% in December 2014

·    A suspension of the current release price mechanism until the LTV is at 60% or below and the debt outstanding is equal to £600 million or less. Subject to other conditions being met, this will allow sales of properties where the proceeds received would be below the historically determined release price.

·    Distributions will be restricted until total debt outstanding is £600 million or less and the LTV is 60% or less.

Simultaneously, with the launch of the Consent Solicitation Process, unitholders in the Mall Fund will be asked to vote on an extension of the Fund to 30 June 2017

It is expected that the unitholder vote and the bondholder vote will take place in the week commencing 5 July, and 15 July respectively.  Completion of the restructuring is conditional on both votes being successful.

The objective of these proposals is to mitigate the existing 2012 refinancing risk by ensuring that the Fund has a robust medium term financing structure, giving it flexibility to de-lever over a sensible time frame and create future value. The proposals will involve further asset disposals and/ or the injection of new equity into the fund to achieve the target LTVs.

The Fund has published further details of the restructuring proposals, together with a business presentation prepared by the fund manager which was presented to the Ad Hoc Committee in February 2010 setting out amongst other matters, a market update, a property and business plan overview and the projected 2010 cash flow for the Fund. The presentation can be downloaded at www.lucid-is.com/mallfunding. If the presentation is downloaded, your attention is drawn to the disclaimers set out therein.

                                           - ENDS -

For further information :

Capital & Regional:                                         

Hugh Scott-Barrett, Chief Executive                   Tel: [phone]

Charles Staveley, Group Finance Director         Tel: [phone]

Maitland:

Martin Leeburn/Emma Burdett                           Tel: [phone]

 

END

 

 

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