Standard & Poor'ssaid last week that the U.K. government green paper reviewing the British Broadcasting Corp. Royal Charter will have no impact on the two CMBS deals tied to the BBC name. The government said it would renew the charter, which will be instated from December 2006 for a further 10-year period. The government said it plans to replace the existing board structure with a new body -- the BBC Trust - and the management function would be headed by the executive board.
Under the charter, the BBC will continue to be funded primarily by the T.V. license fee paid by all households that own one or more televisions, which is estimated to generate around £2.8 billion ($5.3 billion) a year. However analysts at S&P said that, at the moment, the government is looking at the possibility of whether new types of funding may be needed to supplement or replace the TV license fee. "The government has been considering whether to make a share of license fee money available to other broadcasters," explained analysts at Deutsche Bank Securities. "Delaying this decision until mid-way through the next royal charter, as announced by the U.K. culture secretary following publication of the green paper, is clearly credit positive for the BBC."
BBC has two related CMBS outstanding - as the single-borrower in the £813 million Juntura (European Loan Conduit 16) and the £129 million sale-and-leaseback deal BBC Pacific QuayFinance. The BBC has an upcoming 250 million bond issue which will be used to refinance cash borrowed by the BBC and property partner Land Securities to redevelop the London based White City offices. MBIA will wrap provide a triple-A on the notes issued.
