AIG Asset Management has provided a long-term secured debt facility for up £900m to Market Tech, Teddy Sagi’s hybrid e-commerce and real estate firm which owns and manages the iconic Camden Markets, in a move which substantially simplifies the company’s capital structure.
The large refinancing, which carries an initial term of 10 years, is comprised of an initial £300m which will be drawn immediately with a further £100m to be drawn down in May 2016.
The initial drawdown will repay existing £202m debt obligations to with Nomura International and Bank of Cyprus.
In addition, the undrawn working capital loan facility of £60m from majority shareholder, Sagi’s Citwax Investments Limited, will now be withdrawn.
The initial facility – together totalling £400m – has a margin of 100 basis points above the 10 year sterling swap rate, fixed at 1.88%.
The ratcheted annual margin increases over time: to 150 bps after 24 months; then to 175 bps after 30 months; and to 220 bps after 36 months for the remainder of the term. The average margin of the initial facility over the 10 year term is approximately 190 bps per annum.
The drawdown of the initial £300m will set the Market Tech’s loan to value ratio at approximately 35%. A further £50m is available for draw down, subject to certain conditions, until December 2017.
Completing the mammoth refinancing, the AIG facility has two future drawdown pools of £150m and £300m respectively.
These future drawdown pools and the additional £50m facility will have a margin of 200 bps per annum above the 10 year sterling swap rate fixed at the date of utilisation.
UBS Investment Bank acted as lead adviser advised throughout the refinancing process to Market Tech.
Charles Butler, CEO of Market Tech Holdings said: “I am very pleased to announce this landmark agreement for Market Tech allowing flexible access to senior secured debt at competitive interest rates.
“The facility provides the company with stable long term funding, enabling us to drive shareholder value by delivering on our medium and long term acquisition and development strategy.”
Market Tech’s total investment and development property portfolio was valued at £866.7m at the end of September, representing a 15.0% uplift over the preceding six month period. Profit before tax was £10.1m.
Market Tech is seeking admission of its ordinary shares to the Official List and to trading on the Main Market of the LSE.