3 July – LAWFUEL – The Law News Network – Allen & Overy advised The Royal Bank of Scotland plc as arranger and lead manager on a further issuance of commercial mortgage-backed notes by The Trafford Centre Finance Limited, a member of the Peel Acquisitions Group. This is the first tap issue by The Trafford Centre Finance Limited since the original securitisation in 2000, on which Allen & Overy also advised. The £354.55 million issue, together with the existing CMBS bonds, are backed by The Trafford Centre, a 1.6 million sq. ft. shopping mall in Manchester. The issue was completed on 27 June.
A portion of the proceeds was used to refinance the existing floating rate notes whilst the remainder served to refinance existing indebtedness owed by various members of the Peel Acquisitions Group and enabled a sister company, Barton Square Limited, to acquire vacant land adjacent to the shopping centre for development.
The transaction involved the issuance of Reserve Notes which were rated and listed, but purchased by the Issuer on closing. No interest or principal is payable on the Reserve Notes so long as they are held by the Issuer. The Issuer is at liberty to sell the Reserve Notes on any date in order to raise further funds for the Peel Acquisitions Group.
The Allen & Overy team was led by securitisation partner Christian Lambie, assisted by Carmen Fernandez, Belinda Gray and Tessa Brentnall. David Hughes and Adam Blakemore provided tax advice, whilst derivatives advice was provided by Simon Haddock, Jason Tan and Sarah Hannan. Real estate advice was provided by Daniel McKimm, corporate advice by Eileen Kelliher and Richard Kim, and pensions advice by Derek Sloan. Paul Bedford and Torquil Gibbs advised Deutsche Trustee Company Limited and Deutsche International Trustee Services (C.I.) Limited, as security trustee and note trustee respectively. The Peel Acquisitions Group was advised by Travers Smith.
Christian Lambie commented:
“The use of Reserve Notes in this transaction differentiates it from usual tap issues, as they effectively serve as a ‘tap within a tap’, giving the issuer flexibility to raise funds as and when required in a timely and cost efficient manner, without the need for further formality.”