"Bondholders will benefit from a simplified structure and significant rating improvements," says finance director Graham Roberts. "For shareholders, there is improved financing flexibility and reduced interest charges going forward."

The proposed securitization will involve the redemption of existing bonds and the issue of new bonds. If successful, the move would cut group interest costs by about euro 7.28 million ($8.81 million) per year after tax. But the company will have a pre-tax exceptional charge of euro 151 million ($183 million) from the proposed transaction.

British Land proposes to redeem euro 668 million ($809 million) of its existing fixed-rate bonds from the Sainsbury restructure and issue new bonds to investors. The Sainsbury's portfolio being used involves 35 superstores throughout the UK. Bondholders would also receive new fixed-rate bonds with higher coupons than those on similarly rated securities in the current market.

Executives of the property company say class A2 fixed-rate bonds are expected to be upgraded two notches to AAA by Standard & Poor's and Fitch Ratings. The class B2 and B3 bonds are expected to be upgraded three and four notches, respectively, to A by both agencies. Bondholders are scheduled to meet and vote on the restructuring in February.