Mitchells & Butlers announced the refinancing of its securitization last week. The additional debt raised will be used to fund the acquisition of a GBP497 million ($942 million) pub portfolio from Whitbread and to return cash to shareholders. The refinancing involves a net increase in securitized debt of GBP655 million, comprising a bond issue of GBP1.1 billion and redemption of existing floating rate notes. The total securitized debt post-refinancing will stand at GBP2.4 billion.
When the original Mitchells & Butlers Finance plc deal was initially launched in 2003, the securitized estate of 1,942 pubs was valued at GBP3.85 billion. This re-leveraging exercise has been made possible by the appreciation of the security estate, which now includes 1,704 pubs with assets that are currently valued at GBP4.8 billion, an increase of 40% since 2003 when the securitization closed.