Capital & Regional Regulatory News (CAL)

20 Apr 2005 11:53

Capital & Regional plc20 April 2005 20 April 2005 CAPITAL & REGIONAL PLC MALL FUND £1BN BOND ISSUE Below is the text of a press release issued today by The Mall Fund, the leadingowner and operator of community shopping centres in the UK founded by Capital &Regional plc in conjunction with Morley Fund Management, concerning the above.Capital & Regional plc holds a 26.9% stake in the Fund. Enquiries: Capital & RegionalMartin Barber, Chief Executive Tel: 020 7932 8000William Sunnucks, Group Finance Director Tel: 020 7932 8125 gcg hudson sandler Tel: 020 7796 4133Michael Sandler / James Benjamin THE MALL FUND £1BN BOND ISSUE The Mall Fund, the shopping centre fund managed by Morley Fund Management andCapital & Regional, is refinancing £1.06bn of bank debt. This is believed to bethe largest single tranche of Sterling AAA rated Commercial Mortgage BackedSecurities ever issued - this AAA rating being awarded by all three ratingagencies - Fitch, Moody's and S&P. The MallBonds will be listed on the IrishStock Exchange and have been priced at LIBOR +18 bps. The benefits for the Mall and its investors are: • Additional returns to Mall investors of £6m per annum due to reduced interest costs • Flexibility to allow the Fund to exploit asset management opportunities • Extra protection against future interest rate movements • A new £300m Revolving Credit Facility which supports the growth of The Mall business • The average duration of the Mall's debt will increase from 4 to 7 years Commenting on the refinancing Philip Nell, Fund Manager for The Mall at MorleyFund Management, said: "This is a major and innovative deal in terms of size and quality but, moreimportantly, our decision to refinance The Mall Fund's debt is of significantbottom line benefit to our investors. To have achieved a AAA-rating from allthree rating agencies is testament to the quality of the Fund's assets, and theintegrity of the business model." Ken Ford, Chief Executive of The Mall, comments: "The AAA rating confirms the effectiveness of The Mall's revenue based, directmanagement model and our disciplined investment approach. The innovativestructure of this refinancing arrangement also gives us the operationalflexibility we require to continue offering excellent returns for our investors.Following our third year of outperformance we are looking forward to continuingto grow The Mall's portfolio pushing towards our target of 30 community shoppingcentres across the UK within three years." Credit Suisse First Boston was the lead manager and joint book-runner on thetransaction. Further information on the refinancing At present 50% of the value of The Mall portfolio is financed by a syndicatedloan facility and a working capital facility. The MallBonds and the £300mrevolving credit facility will replace all existing fund debt, but will notinvolve the release of any equity. The MallBonds are secured on 20 out of the 22 Malls. Interest is payable atLIBOR + 0.18% and the repayment date is 2012. Significant flexibility has beennegotiated into the terms of the MallBonds with regards to: • Occupational leasing • Capital expenditure • Acquisitions and disposals The interest rate has been fixed on £825m of the borrowing for seven yearsthrough the execution of interest rate swaps. The £300m revolving credit facility is secured on the remaining 2 Malls and hasa second charge over the other 20. It is intended for use in financingacquisitions and developments and to allow increased efficiency in themanagement of working capital. Further information on The Mall The Mall was established by clients of Morley Fund Management and Capital &Regional plc in 2002 and since then has grown to over £2 billion in size with 22shopping centres in its portfolio. Institutional investors in The Mall includeHermes Property Asset Management, F&C Asset Management, Norwich Union,Prudential Property Investment Managers, ING Real Estate, Scottish WidowsInvestment Partnership and Arlington Property Investors. The total return to investors since the launch of The Mall in March 2002 hasaveraged nearly 30% per annum. It has outperformed its benchmark, the IPDAnnual Shopping Centre Series, at a geared and ungeared level every year sinceits formation. The Mall has continued to expand its portfolio across the UK with theacquisition earlier this year of Main Square in Camberley for in excess of£130m. In addition, The Mall purchased six shopping centres during 2004 -Gloucester, Preston, Bristol, Blackburn, Maidstone and Middlesborough - in dealstotalling almost £700m. The Mall plans to expand its portfolio to 30 centresover the next three years, establishing The Mall as the UK's leading communityshopping centre brand. Stabilisation / FSA - Ends - For further information please contact: Redwood Consulting for The MallLiz D'Oliveira / Paul Haines 020 7224 4300 Morley Fund Management 020 7809 8617 /Fiona Baker / Laura Cook 020 7809 8125 NOTES TO EDITORS About Morley Fund Management Morley Fund Management ('Morley') is a London based, asset management businesswith over £128 billion* under management. The property team manages in excess of£15 billion* of UK Property assets, making Morley one of the largest propertyfund managers in the UK. Winners of the high profile Property Week Fund Managerof the Year Award 2004, the team consists of 60 investment professionals andmanages a range of funds on behalf of institutional, pension and retail clients.Morley has been at the forefront of innovation in property fund management andhas launched eleven specialist sector based funds with partners, including theJersey-based Unit Trusts: Ashtenne Industrial Fund, Quercus Healthcare Property,The Junction and The Mall. Visit www.morleyproperty.com *Not including mortgage assets, as at 31/12/04 About Capital & Regional plc Capital & Regional plc is the co-investing asset manager, which specialises intown centre shopping centres, out of town retail parks, and urban entertainmentcomplexes. Capital & Regional founded The Mall and Junction Funds in conjunction withMorley Fund Management. It also founded the X-Leisure Fund with HermesInvestment Management Limited, and has a number of other joint ventures anddevelopments. Its shares are quoted on the London Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange