Four bank club to emerge on Mall Fund’s ‘Project Maple’ £375m refinancing

Rothschild is pouring over a raft of indicative term sheets to refinance the maturing CMBS debt on the Mall Fund, the shopping centre fund majority-owned by Aviva Investors and Capital & Regional. 

The board of the Mall Fund, which is circa 50% and 30% owned by Aviva and C&R respectively, commissioned Rothschild last year to secure a five-year £375m senior loan to refinance the Mall Funding CMBS loan of the same approximate outstanding balance. 

Senior lenders submitted term sheets on 23 January, in the refinancing process known as Project Maple, and a club deal of three or four bank lenders is now expected to emerge. 

On behalf of the Mall Fund, Rothschild is seeking a £375m five-year facility, comprised of £350m drawn down on day one and a further £25m capex facility for the six-strong shopping centre portfolio, which was valued at £684.65m at the end of last December.

Based on which, the LTV is 54.8%.

For the new five-year loan, Rothschild’s is attempting to secure pricing of between 175 and 200 basis points over three-month LIBOR.

Given the metrics of the refinancing ticket, among the more likely banks to emerge on the final club ticket include Wells Fargo, Royal Bank of Scotland, Heleba and Deutsche Pfandbriefbank, CoStar News understands.

The timeline for the refinancing is in time to repay noteholders in Mall Funding CMBS  – at par – at this April’s interest payment date (IPD), on the 22nd of the month which would be one year ahead of the securitised loan’s extended maturity. 

The Mall Fund comprises six shopping centres – across Blackburn, Camberley, Luton, Maidstone, Walthamstow and Wood Green – valued at £684.65m at the end of last December.

Project gross annual rent roll for 2014 is £55m, which is reduced to £53m when adjusted for rent-frees and bad debts, which in turn is further reduced to £43m on a net operating income (NOI) basis, which excludes occupancy and void costs.

Occupancy levels across the portfolio are at 91.1%, with the unexpired lease term to break clauses at 8.8 years and to 9.6 years to full expiry.

Prior to the UK property crash, the Mall Fund was the largest shopping centre portfolio in the UK with 24 assets nationwide valued at just under £3bn and secured by £1.7bn in total debt.   

Aviva Investors, the fund manager for the Mall Fund, has undertaken a substantial deleveraging and disposal strategy since which time to return the fund to a stabilised and conservatively leveraged position ahead of this refinancing.

All parties declined to comment.

About CoStar News

Finance Editor, CoStar News
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