Intu extends Trafford CMBS to pull in additional £110m

Mall specialist’s third bond issue in a year raises funds for development

Intu has raised £110m of debt through a tap issue of its intu Trafford CMBS, which was established in 2000. The shopping centre specialist issued £110m of additional A, B and D notes, adding to the existing A, B and D tranches. A4 is a £20m, five-year issue, B3 a £20m, 10-year issue, and D3 a £70m, 10-year issue.

They are priced at spreads of 110 basis points, 160bps and 210bps respectively, giving an average maturity of nine years and an average spread of 183bps over the relevant gilt, representing an all-in cost of 4.6%. “We’re very happy with the pricing,” said intu finance director Matthew Roberts.

“We have some exciting development opportunities at intu and the proceeds will be used to help fund them.” This is intu’s third bond issue in 12 months under its new debt platform; the US quoted REIT has raised £1.4bn over the period.

Last November the company raised £485m with a 10-year, single-tranche, 4.125% bond secured on the Metrocentre,  priced at a spread of 137bps. In March 2013 the inaugural issue for the new platform brought in £800m, divided into two instalments: £450m of 3.875% bonds due in 2023, and £350m of 4.625% bonds due in 2028, priced at spreads of 210bps and 205bps respectively.

The REIT is also reported to have arranged two new loan facilities to help fund purchases it is negotiating with Westfield. A £211m, three-year loan from Deutsche Bank and HSBC will help fund intu’s purchase of Westfield’s 50% stake in the Merry Hill shopping centre in Birmingham, while UBS and Lloyds have provided another £200m of short-term financing to buy Westfield’s Derby centre. However, Roberts would not confirm this.