3 March 2005 – LAWFUEL – The Law News Network – Allen & Overy today c…

3 March 2005 – LAWFUEL – The Law News Network – Allen & Overy today closed the £2,080,000,000 refinancing of the Broadgate Estate in the City of London, advising Morgan Stanley as arranger, consent solicitation agent and joint lead manager, as well as RBS and UBS as joint lead managers. The transaction involved a rare consent solicitation and early redemption of existing fixed rate bonds backed by the Broadgate Estate, the redemption of existing floating rate bonds and the issue (to existing and new bondholders) of new, fully secured bonds backed by all the buildings and rental cashflows in the current estate. The Broadgate Estate is owned by members of the British Land Group. Allen & Overy advised Morgan Stanley on the original securitisation in 1999.

Following negotiation with a special committee of bondholders established by the Association of British Insurers (ABI), the proposals for early redemption and issue of the new bonds were passed by meetings of the relevant classes of bondholders, with over 98% support for each class and unanimous votes at each bondholder meeting.

The redemption of the existing fixed rate bonds was settled primarily by the issue of new bonds of each relevant class, re-priced to current market spreads; in addition, the increased collateral pool, the valuation uplift since 1999 and the current spread environment for high quality CMBS paper allowed considerable extra leverage to be obtained through the issuance of additional fixed and floating rate bonds.

The Allen & Overy team was led by securitisation partner Christian Lambie, assisted by associates Carmen Fernandez, Karl Horvath, Shanika Amarasekara and Aiden Small. Banking partner Philip Bowden (assisted by associate Tim Macmillan), Real Estate partner Adam Cleal (assisted by associate Ben Taylor), Corporate partner Eileen Kelliher (assisted by associate Derrick James), Tax partner Mark Brailsford (assisted by associate Gareth Banfield) and Derivatives partner Richard Tredgett (assisted by associate George Palmer) also advised.

The Trustee, Capita IRG Trustees Limited, was advised by Allen & Overy partner Morgan Krone, assisted by associates Malcolm Charles and Sarah Crouch.

Christian Lambie commented:
“It was quite an undertaking to combine the consent solicitation with the CMBS refinancing. We worked closely with Morgan Stanley and the other managers to be able to structure and execute a notable high-value financing under tight fixed deadlines. Our CMBS practice continues to go from strength to strength.”

British Land was advised by Simmons & Simmons and SJ Berwin.

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