

Intu announced a £350m bond today to follow the transfer of two more of its UK shopping centres into the group’s secured funding structure, Intu (SGS) Finance.
Intu (SGS) Finance was set up in March 2013 and includes four other centres worth £2.47bn, Intu Lakeside, Intu Braehead in Glasgow, Intu Watford and Intu Victoria Centre in Nottingham. When completed, the six assets held will have a combined value of £3.15bn and after the new £350m bond’s issuance will have total debt of £1.5bn, equivalent to a 48% LTV.
The new tap issue is the first since the SGS structure was set up and illustrates that cheap debt via the capital markets continues to be an attractive diversified funding source for large listed property companies despite the deep liquidity in the bank market.
Intu has active in the bank market refinancing its portfolio in the past quarter, refinancing £453m of loans with £763m of new facilities. It agreed a £163m loan with Wells Fargo in August, replacing a £78m loan held against its 50% stake in the St David’s shopping centre in Cardiff.
And last week the REIT refinanced the group’s £375m revolving credit facility with a new £600m facility with Bank of America Merrill Lynch, Credit Suisse, HSBC, Lloyds Banking Group, UBS, Barclays and Royal Bank of Scotland. The new facility has an initial margin of 140bps and is for five years with two, one-year extensions.
The group bought Intu Derby in March from Westfield. It was one of three assets bought from Westfield for a combined consideration of £867.8m, alongside a 50% stake in Merry Hill shopping centre near Birmingham and Sprucefield Retail Park in Northern Ireland.
The new bond is expected to be rated A(sf) by Standard & Poor’s.