MetLife and Santander join Bayern LB’s Mall refinancing

Additional lenders help refinance assets in Henderson Outlet Mall Fund

Bayern LB has brought in two new lenders for a £265m refinancing of the three assets in Henderson Global Investors’ £432m UK Outlet Mall Fund.

Bayern LB provided the original £210m finance five years ago for Henderson’s purchase of three McArthur Glen schemes at Cheshire Oaks, Bridgend and Swindon, but is scaling back on international lending.

For refinancing, the German landesbank brought in MetLife to lend £125m against the Cheshire Oaks and Bridgend assets, while lending £75m itself.

Bayern LB teamed up 50:50 with Santander to provide a £65m development loan for the Swindon outlet, which will convert into an investment loan when almost 50,000 sq ft of new shops and restaurants are completed at the centre, in August 2015.

Both are five-year facilities, which will run until the end of the 10-year fund’s life in 2018.

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Throssell: “Bayern LB remains the agent on both deals and arranged both new loans”

Henderson’s head of treasury Colin Throssell said of the Swindon outlet’s loan: “There is a step down in margin after the two-year development period, if agreed pre-let and rental
hurdles are met.”

Bayern LB wanted to share the risk, while Henderson has a strong relationship with Santander, he added.

Bayern has cut its overall commitment as sole lender on the assets from £210m to £107.5m.

“Prior to the refinancing, Bayern LB provided 100% of a £210m loan covering all three assets,” Throssell said. “After the refinancing three lenders are involved. Bayern LB remains the agent on both transactions and arranged both new loans.”

Like many German lenders, most of Bayern’s new business is concentrated in Germany. It wrote €1bn of new loans in the first half of this year.

The bank has a close relationship with Henderson; two years ago it made a £70m loan to refinance the St James shopping centre in Edinburgh, which is held in the Henderson UK Shopping Centre Fund.

Mike Worley, head of property lending at the bank’s London branch, said the deal showed the bank’s expertise in financing outlet centres, not just in the UK but throughout Europe.