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Capital & Regional Says Mall Fund Refinances Commercial Mortgage-Backed Securities

June 2, 2014

Samuel Agini

LONDON (Alliance News) - Capital & Regional PLC Monday said that The Mall Fund has refinanced its commercial mortgage-backed securities by agreeing a new bank facility with US investment bank Morgan Stanley.

In a statement, Capital & Regional said it has entered a new five-year secured bank facility made up of a GBP350.0 million term loan and additional GBP25.0 million capex facility. The specialist property company said the facility gives it the flexibility to continue its investment programme that it says will enhance returns from The Mall Fund's assets.

"This refinancing has been achieved at a very attractive all-in cost against the current initial yield of 6.7% produced by The Mall Fund's assets. It has allowed us to establish a strong platform for growth by creating the flexibility for The Mall Fund to continue its programme of capital investment in order to create long term value, at a time when sentiment is improving in both the investment and tenant markets," Chief Executive Hugh Scott-Barrett said in a statement.

The Mall Fund and Aviva, its fund manager, were advised by Rothschild on the refinancing, according to Capital & Regional, which founded the fund with Aviva Investors.

The commercial mortgage-backed securities will be settled from a combination of both the new term loan, an associated GBP10.67 million interest rate swap liability triggered on repayment, and The Mall Fund's cash.

Commercial mortgage-backed securities asset-backed securities backed up by commercial property mortgages. Capex, or capital expenditure, refers to the purchase of long-lived assets.

Capital & Regional shares were Monday quoted at 47.00 pence, up 0.5%.

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Source: Alliance News

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