LONDON-Liberty International has raised euro 1.04 billion ($1.34 billion) through non-recourse term loans secured on two of its shopping centers--the Braehead in Scotland and the Harlequin in Watford. The loans have been provided through the specialist real estate bank Eurohypo. The bank is raising the funds through the issue of floating-rate CMBS. The underlying Libor rate has been fixed at 5.3% before costs.
The funding "continues Liberty International's program of raising long-term asset-backed non-recourse finance," Liberty officials say in a prepared statement. "The structure also enables us to obtain capital-market debt pricing while retaining the flexibility of a bank loan." The same structure was used for the euro 951.35-million ($1.22-billion) refinancing of Lakeside, the company's flagship regional shopping center, in August 2004, and for the euro 878-million ($1.13-billion) financing of MetroCentre in Gateshead in February this year.
Liberty chairman Donald Gordon says this latest CMBS issue "substantially enhances our overall debt structure as we continue to pursue our development program." Demand is still strong in the capital markets for highly-rated debt securities backed by premium assets such as our regional shopping centers."
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