Center Parcs group in the U.K. plans to issue a ₤1.020 billion ($1.6 billion) hybrid transaction that blends corporate securitization of the operating business with subordinated high-yield issuance.
The deal features a component that is a first of its kind in the European corporate securitization market.
Standard & Poor's, which assigned preliminary ratings on the offering, said that the hybrid structure called CPUK Finance will effectively function as two separate transactions.
The Class A and Class B notes will each be subject to separate terms and conditions governed by an intercreditor agreement, although sharing in the same ultimate security. The class A1 and A2 notes have been rated 'BBB' and the class B notes have been assigned a 'BB' rating.
The feature where the notes will have distinct terms and conditions while sharing the same security will be the first of its kind in the European corporate securitization market.
In addition, the CPUK Mortgage Finance structure provides that the Class B noteholders can take control of the topmost company in the Center Parcs corporate structure if the business fails to repay the Class B loan at expected maturity.
The transaction will refinance present liabilities of the Center Parcs group, including CPUK Mortgage Finance Ltd., the ₤750 million CMBS transaction secured on Center Parcs' property-related assets and the existing hedging arrangements of the borrower under that offering.
Center Parcs, a subsidiary of the Blackstone Group, is a family-oriented all-year provider of outdoor short-break holidays in the U.K. The business currently comprises four holiday villages in Suffolk, Wiltshire, Nottinghamshire, and Cumbria, respectively.