The owner of office campus Birchwood Park in Warrington has set about refinancing to reduce borrowing, paying off £102m of its £470m commercial mortgage backed securitisation loan.
MEPC, owner of eight business parks in the UK, will make the payment on 20 January 2011. The company said the prepayment was part of a wider financing strategy to address the early repayment of the securitised loan before its maturity in July 2012.
The CMBS was completed in November 2005, arranged by Eurohypo AG, and is secured against four of MEPC's business parks: Milton Park in Oxfordshire, Birchwood Park in Warrington, Chineham Park in Basingstoke and Hillington Park in Glasgow. The four have a combined value of £619m.
Following the prepayment, Birchwood Park will be released from the securitisation. MEPC will use a combination of cash from recent disposals alongside a new five-year facility of £62m from Eurohypo AG secured against Birchwood Park to repay the £102m of the £470m CMBS.
As a result of the prepayment the loan to value ratio of the securitised loan reduces to 74%, and interest cover remains at 192%.
Rick de Blaby, chief executive of MEPC, said: "MEPC's early repayment of part of the CMBS Notes underscores both the company's robust financial position and prudent debt management strategy. It was always our intention to proactively address the refinancing ahead of maturity, reduce the gearing and position ourselves for a new phase of activity and performance. Our valued long term relationship with Eurohypo is important in those aims."
Michael Acratopulo, head of origination at Eurohypo, said: "The new bank debt facility for Birchwood Park is a good quality asset for Eurohypo and also assists MEPC in their refinancing strategy."