The BBC is to fund its new 257,000 sq ft (23,875 sq m) Scottish HQ (pictured) at Pacific Quay, Glasgow, with a £130m securitisation.
The corporation used a similar £813m sale-and-leaseback transaction for the redevelopment of Broadcasting House in London. It is using special purpose vehicle Pacific Quay Finance to issue the commercial mortgage-backed bonds.
DTZ has estimated that when the building is completed it will be worth £95m, resulting in a loan-to-value ratio at completion of around 137%. The BBC will be the sole tenant, on a 30-year lease.
Barclays Capital is the arranger and lead manager of the bond issue. Robert Palache, MD and head of real estate and corporate securitisation, said: “We are convinced bondholders will be attracted by the BBC covenant. It is structured purely on cash flow. The bondholders have no residual property risk.”
Proceeds of the loan will be used to meet expenses during the rent-free construction period, and for the establishment of an interest reserve.
Land Securities is the construction manager for Pacific Quay. Bovis Lend Lease is the contractor.
References: EGi News 02/07/04
