Capital Shopping Centres Group Plc, the U.K.’s largest publicly traded mall owner, arranged a 375 million-pound ($590 million) loan to cut borrowing costs.
The revolving credit line replaces an undrawn facility for 248 million pounds due in June 2013, Capital Shopping said today in a statement. The financing has a minimum term of five years and represents “an all-in rate reduction of 25 to 50 basis points,” the London-based company said.
Capital Shopping agreed to pay initial interest of 175 basis points more than the London interbank offered rate if it draws the credit line, according to the statement. The interest margin will rise to as much as 225 basis points if the debt to equity level at the group excluding certain assets rises to more than 75 percent. A basis point is 0.01 percentage point.
“The new facility provides us with considerable flexibility over the next five years, potentially seven, and underpins our robust financing position,” Capital Shopping Finance Director Matthew Roberts said in the statement.
HSBC Holdings Plc and Lloyds Banking Group Plc coordinated the transaction. Bank of America Corp., Credit Suisse Group AG and UBS AG participated.
Capital Shopping owns 10 of the U.K.’s 25 largest malls by retail sales including the Metrocentre at Gateshead and Manchester’s Trafford Centre.