Center Parcs Group, a vacation resort company that operates short-break vacation sites across England, plans to sell £830 million (US$1.06 billion) in bonds backed by its operational cash flow, according to S&P Global. Proceeds will be used to refinance existing debt and pay a dividend to a related firm.
Three tranches of notes will be issued in the transaction, CPUK Finance: £100 million of senior Class A4 notes with a preliminary BBB rating from S&P Global and two tranches totaling £730 million in subordinate Class B notes rated B. The class B tranches are £365 million each and have staggering expected maturities of August 2022 and August 2024. Interest is fully deferrable.
Proceeds will be used to refinancing subordinated class B notes issued by the securitization trust in August 2015 that becomes callable in August 2017, according to S&P.
After the repayment of the 2015 B2 notes, the trust will pay a dividend to an affiliate of Center Parcs, CP Cayman Midco 1 Ltd., according to S&P. The B2 notes were originally tied to the reported £2.4 billion acquisition of Center Parcs by Canada-based Brookfield Asset Management from Blackstone, in a deal that closed in August 2015.
The cash flow is derived from Center Parc's five getaway settings of secluded village cabins and lodgings that have had a five-year average occupancy rate of 97%.
The company reported net EBITDA of £155.2 million on revenues of £312.6 million in the first three quarters of fiscal year 2017 – a margin of 49.6%. The company’s revenue-per-lodge figure was £179.6 million, a 4.9% jump from last year.