Clifford Chance advised MBIA Assurance SA as Financial Guarantor on a groundbreaking property securitisation to raise £813m for the development of the BBC’s London headquarters, Broadcasting House, into the largest, live broadcasting centre in the world.
The art deco building will be developed by Land Securities Trillium Limited
in two phases. The first is due to complete in 2005 and the second in 2008, following which the building will house BBC News, BBC radio and music and
the BBC World Service. The national broadcaster will finance the development through a lease and lease-back arrangement.
Morgan Stanley is lending £813m to a special purpose vehicle, Daunus
Limited , jointly set up by the BBC and the developers. The BBC will then
sell a 150-year leasehold interest to Daunus Limited, who will lease the
property back to the BBC for a term of 30 years.
Morgan Stanley will then securitise the loan by transfering its interest in the loan to Juturna
(European Loan Conduit No. 16 ) plc, another UK incorporated special purpose
vehicle who will fund the purchase of the loan through the issue of 30-year
amortising notes. The Notes will be assigned a AAA credit rating by Standard & Poor’s, AAA by Fitch and Aaa by Moody’s Investor Service which is solely based on the unconditional and irrevocable financial guarantee as to scheduled payments of principal and interest provided by monoline insurer, MBIA Assurance SA.
Said Debashis Dey, lead Clifford Chance securitisation partner advising on
the transaction: “This is the first time the BBC has tapped the capital markets, and the transaction is a testament to the innovation and dynamism of everyone involved in structuring the transaction.”