Bruntwood to extend £230m debt deadline
COMMERCIAL property group Bruntwood is looking to extend the repayment deadline on around £230m of debt as part of its refinancing plans.
Last week it secured a £120m loan with Legal & General which it said it would use to refinance part of the £432.5m of Commercial Mortgage Backed Securities (CMBS) which were initially arranged through RBS in 2007.
Two loans within the CMBS are due for repayment in January 2014 but the Manchester group wants to repay one, worth £203.4m, and extend the deadline on the other for two years.
The move must be passed by a special resolution of bondholders at an extraordinary meeting in London on February 19. Bruntwood said it had “very strong support” for the proposal.
It is also in the middle of talks with RBS, HSBC and Barclays about extending and increasing a £170m medium-term loan facility.
Chief financial officer Kevin Crotty, said: “In negotiating the extension of part of our CMBS, we have been heartened to see that there is still strong demand in the market for bonds which are backed by a recognised sponsor, secured on a performing portfolio.
“Far from being dead, it would appear that the CMBS market could yet play an important part in providing investors with strong running yield and help the commercial property market address its major debt cliff issue.
“We were also pleased to see, through the back end of 2012, a significant increase in liquidity in the banking sector. Whilst there is still a long way to go, this, coupled with the return of demand in the bond markets and the increase in institutional lending represent some long overdue positive movements in the funding of commercial property.”
