4 December 2004 – LAWFUEL – First for law firm news, legal, attorney news – Spirit Group has completed a £2.125bn refinancing of the Scottish & Newcastle pubs estate it bought for £2.5bn in November 2003 and its existing securitisation financing. The refinanced estate comprises a portfolio of more than 2,000 pubs. International law firm Freshfields Bruckhaus Deringer advised a core syndicate of Barclays, Citigroup, Goldman Sachs, The Royal Bank of Scotland and Merrill Lynch as lead managers of the refinancing.
The refinancing consists of a bond issue (combining elements of whole business securitisation and debentures) plus a traditional senior syndicated bank financing as well as a subordinated bank financing. There are five tranches of debenture bonds totalling £1.25bn, secured on 1,080 pubs. The senior bank financing consists of a £550m of term debt plus a £50m working capital facility secured on another 951 pubs, plus a junior ranking charge on the rest of the portfolio. The subordinated bank financing consists of a £275m term facility secured by a junior ranking charge on the portfolio.
Marcus Mackenzie, the partner leading the Freshfields team, said, ‘This structure will deliver stability and flexibility to the financing of Spirit’s pub portfolio over the medium term, while preserving freedom for Spirit to manage its portfolio, something the group values highly’.
Barclays Capital, Citigroup, Goldman Sachs, RBS and Merrill Lynch are the lead managers and joint book runners for the debenture issue. These banks are also the lead arrangers for the senior bank financing and the subordinated financing.
Notes for editors
Freshfields Bruckhaus Deringer is a leading international law firm providing a comprehensive worldwide service to national and multinational corporations, financial institutions and governments.
The firm’s structured finance team is widely regarded as one of the world’s best. It operates at the cutting edge of structured finance work, structuring and implementing innovative and complex transactions in structured products, securitisations, derivatives and tax driven schemes. The team works for a range of organisations including major financial institutions, asset originators, asset purchasers, insurers, rating agencies and other market organisations.
