Minerva has raised £60.5m through a non-recourse refinancing of the HarperCollins publishing complex in Glasgow.
The loan effectively securitises the income from the prop-erty, and means that Minerva now has around £80m cash.
Chief executive Andrew Rosenfeld said: “We’ve made a bold statement. Over 25% of our net assets are in cash at an interesting point in the cycle. There will be interesting opportunities and we can move quickly.”
Arranged by BHF-Bank and funded by Hamburgische Landesbank, the 27-year loan does not include any loan-to value covenants and uses the existing cash flow to amortise the principal over the term of the borrowing.
The income is jointly and severally guaranteed by HarperCollins and its parent companies, News International and News Corporation.
“It’s a very strong cash flow and, with the play on the long bond, if you structure the cash flow correctly, you can realise significant value,” said Rosenfeld. “We’ve been able to realise the book value of the property and still own it.”
The financing replaces an existing £38m facility provided by WestDeutsche Landes-bank at the end of 1994.
The new loan carries an interest rate of 6.5% compared with 10.2% under the previous facility, saving Minerva £1.39m pa. The deal has cut Minerva’s weighted average cost of borrowing from 8% to 7.4%. An existing swap agreement was unwound at a cost of £6.7m.
