This article is from the Australian Property Journal archive
CENTRO Properties Group has refinanced $US2.7 billion of the $US3.2 billion of debt within Super LLC.
Super LLC is based in the United States and is a joint venture of Centro, Centro Retail Trust and the Centro MCS 40.
The $US2.7 billion financing arrangements include an extension of approximately $US2.3 billion from December 31 2010 to December 31 2011, and a refinancing of over $US0.4 billion. A number of options to address the remaining balance of approximately $US440 million.
The extension includes Super LLC’s $1.7 billion bridge term loan ($1.2 billion CNP, $0.5 billion CER) and $580.0 million of additional debt.
Centro NP (a subsidiary of Super LLC) has also entered into new term loans of $US659.0 million which mature in ten years and carry a fixed interest rate of 6.75%. These loans are secured by 76 properties that are owned by Centro NP. Proceeds from these loans will be used to repay approximately $US469.3 million of Centro NP debt scheduled to mature on December 31 2010.
A portion of the remaining $US189.7 million of proceeds from the new term loans will be used to repay a $US103.4 million loan ($38.4 million CNP, $65.0 million CER), which currently has an effective interest rate of 11.7%, with the remainder to be used to address future debt maturities.
In addition Centro MCS 32 and Centro MCS 39 have also extended two additional US debt facilities outside of Super LLC, including a $US104.2 million secured term loan ($US3.1 million CNP, $US101.1 million Centro MCS 39) and a $US20.5 million outstanding secured revolving credit facility ($US0.62 million CNP, $USUS9.94 million CER, $US9.94 million Centro MCS 32). There is no change in credit margins as a result of these extensions.
Centro CEO Robert Tsenin said these extensions are important initial steps in the ongoing assessment of the group’s restructuring considerations.
Meanwhile Tsening said Centro has made good progress and have commenced discussions with lenders on potential restructuring options.
“Our assessment has confirmed that any restructure will be complex, with numerous structural, financing and stakeholder considerations to manage and no decisions have been made at this stage. To complete a restructure and recapitalise the group, approvals and consents will be required at many levels,” Tsenin said.
Subject to market conditions, it is expected that any restructure could take through to the end of 2011 to implement. Centro will report to the market its overall restructuring and recapitalisation plan upon reaching consensus with stakeholders.
Tsenin also hinted that Centro is in discussions with strategic parties to invest in its Centro MCS syndicate funds management business.
He said the CNP’s syndicate property funds management platform is the largest in Australia, and is an attractive platform for a party seeking to gain immediate scale, presence and diversity via a significant portfolio of quality retail assets under management, 16,000 retail investors and a network of over 1,000 financial planners.
Centro shares closed 1 cent higher at 21 cents yesterday. The group was also quizzed by the ASX yesterday on its recent price movement, from 15 cents at the close of trading on July 26 to 18.5 cents as at July 28.
Centro said it is not aware of any other explanation for the price change in its securities.
Australian Property Journal
