Deutsche Bank and Credit Agricole has sold £750 million ($1.26 billion) of bonds backed by the Westfield shopping center at the tighter end of initial price guidance, according to a person familiar with the deal.
The single tranche transaction, STRAT 2014 was sold at 86 basis points over three month Libor. It was initially marketed at the 86-to-88 bps range. DBRS and Fitch Ratings assigned preliminary ratings of AAA’ to the tranche.
Proceeds from the deal will fund the refinancing of a five-year loan backed by the 1.9m sq ft Westfield Stratford City shopping center, located in the East of Central London. The financing is a straight five-year loan without the intention to increase future borrowing within the existing structure. “This eliminates the possibility of releasing equity after a period of sustained growth and is therefore credit positive,” explained Fitch.
Deutsche Bank and Credit Agricole will not to retain a 5% stake in the deal since it is not classified as a securitization under the European Commission’s Capital Requirements Directive (CRD) retention rules. The CRD defines a securitization as comprising multiple tranches of bonds.