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New Vehicle for Issuing Investment Grade Secured Debt
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
Press Release
INTU PROPERTIES PLC
27 FEBRUARY 2013
INTU ANNOUNCES ESTABLISHMENT OF NEW VEHICLE FOR ISSUING INVESTMENT GRADE
SECURED DEBT
Intu today announces the establishment of a new debt funding platform, a special purpose vehicle for issuing investment grade
secured debt. This secured group structure (“SGS”) will become a central source of financing for the Group. The SGS will
enable us to access the medium and long dated bond and private placement markets on an ongoing basis alongside bank debt,
thereby diversifying the Group’s sources of funds beyond the banking markets and lengthening its maturities. We will in 2013
absorb the costs of the launch of the platform, principally from early settlement of existing interest rate swap obligations.
Overview of the SGS platform
The Group will initially use the platform to refinance intu Lakeside, intu Braehead, intu Watford and intu Victoria Centre. The four
centres will be contributed into the SGS which will issue bonds and raise bank debt secured against them. These are highly
attractive, prime, wholly owned centres valued at £2.3 billion with annual footfall of around 80 million and retail space of 4.3
million sq ft, so the security pool will offer bond investors and lenders a diversified exposure to prime retail assets across the UK.
The SGS will, subject to market conditions, initially borrow approximately £1,150 million through a benchmark sterling bond issue
and bank debt including a bridge facility, corresponding to an overall loan to value ratio of around 50 per cent. The
establishment of the SGS therefore will achieve a refinancing and maturity extension on about one third of the Group’s debt and
over 55 per cent of the Group’s debt that is falling due within the next 3-5 years. The bridge facility is anticipated to be
refinanced through further capital markets issues as market conditions allow. The bond roadshow will commence on Monday 4
March and the bank debt, which has already been signed, will come into effect when the bonds are issued.
Key features of the SGS platform
• structured to issue debt capable of being assigned an ‘A’ category rating, ensuring ready access to the bond markets
• all debt within the SGS will be ranked pari passu
• balances the operational flexibility that Intu needs to manage the assets with the credit protections that bond investors and
bank lenders require
• offers flexibility to contribute (or substitute) assets, issue new debt and fund development capital expenditure
• provides a dynamic covenant regime. Below 55 per cent LTV and over 1.60x ICR (“Tier 1”), the Group retains broad
operational flexibility; there is some reduced flexibility in an intermediate Tier 2; and in Tier 3 (over 72.5 per cent LTV and
under 1.40x ICR) there would be appropriate restrictions to protect lenders
Initial costs and accounting treatment
The costs associated with establishing the SGS and facility fees on the initial bond and bank debt will be amortised over the life
of the relevant debt. The cost of terminating the swaps linked to the four pooled assets’ existing funding is estimated to be £60
to £70 million, which will be accounted for as a one-off exceptional charge to the income statement and which will reduce diluted
adjusted net asset value by the same amount.
The Group will contribute around £200 million from existing cash and facilities to fund the balance of the refinancing on the
existing debt secured on the SGS assets of £1,306m as well as to fund the swap break costs and transaction costs.
The SGS is anticipated to lower the Group’s medium-term average cost of debt, however the initial phase may create a short-
term increase in funding cost as existing swap obligations are paid earlier than previously scheduled.
Matthew Roberts, Finance Director of Intu Properties plc, commented:
“We are pleased to announce the establishment of a vehicle for issuing investment grade debt
which will become a central financing platform for the Group. This robust and flexible platform
diversifies the Group’s sources beyond the banking markets and brings the considerable benefits
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of ready access to debt markets through an investment grade rating, access to longer maturities
and ability to issue a range of instruments at competitive margins.”
Enquiries:
Intu Properties plc
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Finance Director +44 (0)20 7960 1353
Kate Bowyer Head of Investor Relations +44 (0)20 7960 1250
Public relations
UK: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA: Nick Williams/Vanessa Hillary, College Hill +27 (0)11 447 3030
A copy of this announcement is available for download from our website www.intugroup.co.uk.
NOTES TO EDITORS
Intu Properties plc (formerly Capital Shopping Centres Group PLC) owns and operates some of the very best
shopping centres, in the strongest locations right across the country, including ten of the UK’s top 25. You can find
every one of the UK’s top 20 retailers in our shopping centres, alongside some of the world’s most iconic global
brands.
With 16.6 million sq ft of retail space, valued at £7 billion, our centres attract over 320 million customer visits a year
and two thirds of the UK population live within a 45 minute drive time of one of our centres.
At the forefront of UK shopping centre evolution since the 1970s our focus is on creating compelling destinations for
consumers, with added theatre.
On 15 January this year, we announced the creation of a nationwide consumer facing shopping centre brand - intu -
and the transformation of our digital proposition including a transactional website, to provide the UK’s leading
shopping centre experience on and off-line.
We have an investment plan of £1 billion over the next ten years on active management projects and major
extensions of existing assets involving most of our centres.
Over 80,000 people are employed at our centres across the UK and we are fully committed to supporting our local
communities and the wider environment through meaningful and hands-on initiatives.
We changed our name from Capital Shopping Centres Group PLC to Intu Properties plc on 18 February 2013.
This press release contains “forward-looking statements” regarding the belief or current expectations of Intu Properties plc, its Directors and
other members of its senior management about Intu Properties plc’s businesses, financial performance and results of operations. These
forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve
known and unknown risks, uncertainties and other factors, many of which are outside the control of Intu Properties plc and are difficult to predict,
that may cause actual results, performance or developments to differ materially from any future results, performance or developments expressed
or implied by the forward-looking statements. These forward-looking statements speak only as at the date of this press release. Except as
required by applicable law, Intu Properties plc makes no representation or warranty in relation to them and expressly disclaims any obligation to
update or revise any forward-looking statements contained herein to reflect any change in Intu Properties plc’s expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement is based.
Any information contained in this press release on the price at which shares or other securities in Intu Properties plc have been bought or sold in
the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance.
Sponsor
Merrill Lynch South Africa (Pty) Ltd
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