Centre Parcs, the UK holiday operator, is partially refinancing its debt with a £490m CMBS.
The issue, CPUK Finance, is in two tranches of senior A notes: a five year, £350m piece carries a coupon of 2.667%, 135bps over the benchmark gilt while £140m of 10-year bonds are priced at spread of 165bps, a coupon of 3.588%.
Paul Inglett, finance director of Center Parcs, said, “”We are delighted to announce the pricing of the new bond issuance, which sees Woburn Forest form part of the whole business securitisation, optimises the group’s capital structure and reduces the cost of debt.”
The new notes, plus existing cash, will be used to repay a £300m class A1 tranche of Centre Parc’s existing CMBS, which is due to mature in 2017. They have preliminary ratings of BBB(sf)/ BBB from Standard & Poors and Fitch respectively.
In 2012 the group, which is owned by Blackstone, refinanced its debt with a €1.02bn securitisation backed by its holiday business and four villages. That issue was the first time a European CMBS combined an investment-grade whole business securitisation with a high-yielding tranche, a blend which appealed to a wider range of investors.
It carried much higher coupons: £300m of five-year, class A1 bonds paying 4.811%, 390 basis points above the benchmark gilt; a £440m, class A2, 12-year tranche, paying 7.239%, a 465bps margin, plus an additional high-yielding, £280m, six-year subordinated class B, paying 11.625%.
The new notes will rank pari passu with the existing A2 notes. It includes Center Parc’s fifth holiday village, Woburn Forest, in its security package, refinancing the bank facility used for its development.
The lead managers are Barclays and Deutsche Bank