Through subsidiary Capital Shopping Centres, Liberty International hopes to make significant gains through lower interest costs with this 12-year facility, which is better than a 'conventional nonrecourse secured bank loan'.
Secured by two Capital Shopping Centres' retail developments, The Glades in Bromley and The Chimes in Uxbridge, the loan matures in 2014 and has largely fixed interest rates.
After two years the loan can be repaid in full at any time without a penalty.
Liberty International's CE David Fischel said the HVB loan would increase the group's cash and other bank facilities that were not utilised to over £600m.
Fischel said this capital would provide medium-term funds for expansion and development announced in the past few months.
These included the acquisition by Capital Shopping Centres of a 100% interest in Chapelfield, a £275m planned retail development in Norwich in the UK.
Capital Shopping Centres was expected to deliver £40m in cash at the start of construction at Chapelfield in July.
A Scottish retail development, Braehead in Glasgow, was to be transformed into a mixed-use development incorporating a 28000m² business park, residential development and a variety of entertainment amenities.
Fischel said other new developments included the multimillion pound extension at MetroCentre, Gateshead and projects at Oxford, Cardiff and Liverpool that were at the planning stage.
Liberty International had also ventured into the US market through its subsidiary Capital and Counties USA.
The group recently acquired a 119m regional shopping centre, Serramonte Shopping Centre, in Daly City, California.
Liberty's interests in the US have been boosted to more than $300m following this transaction.
Liberty International chairman Donald Gordon said: 'We are delighted to have worked with HVB in creating this innovative financing structure, which we believe combines the benefits of capital markets with the flexibility expected from a traditional loan funding.
'We are confident that the efficiencies offered by this financing will provide a substantial saving of interest over the term of this facility,' said Gordon.
'The transaction continued Liberty International's strategy of financing our major shopping centre assets on a nonrecourse basis, whilst retaining full financial and operational flexibility to continue active management and to deliver added value in the future,' Gordon said.
Business Day
Publisher: Business Day
Source: Business Day
