11-Feb-2012 - Center Parcs plans £1bn bond issue

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Center Parcs is looking to raise £1bn through a bond backed by four of its holiday villages as the British holiday parks group seeks to refinance debt and expand its business. The group, which is owned by US private equity group Blackstone, has hired Royal Bank of Scotland, Barclays, HSBC and Lloyds to manage the bond sale. Proceeds of the bond issue will be used to refinance commercial mortgage-backed securities that are due to mature in 2013. The private equity group originally arranged nhl jerseys from china the bond in October 2011, but is understood to have waited until the appetite for risk improved before taking it to market. This time, Center Parcs plans to use a "whole business securitisation" model, whereby the bond is backed by revenue from its four Center Parc villages in Cumbria, Nottinghamshire, Suffolk and Wiltshire. Center Parcs recently received approval to build its fifth holiday village in Woburn, Bedfordshire. Blackstone, which acquired the operating business and Center Parc villages in 2006, is understood to have looked at selling some of the business' assets in 2010. A Center Parcs loan was financed through a £1.1bn commercial mortgage-backed security in 2006. However, Blackstone is understood to have decided against refinancing in the traditional real estate mortgage market. The group made a similar move last year when it refinanced debt on Groupe Vitalia, NFL jerseys the French hospital chain it owns, outside the real estate market. The property-lending market in Europe is suffering from a widespread retrenchment of new finance; France's Société Générale and Germany's Eurohypo, two of the largest lenders to the sector, have suspended lending. Moreover, many banks will not lend on anything other than offices and retail property, viewing less traditional assets, such as hotels and leisure facilities, as too risky. For the year to April 2011, Center Parcs had earnings before interest, tax, depreciation and amortisation of £131m, up from £126.5m the year before, on revenues of £290.5m. Last year the business had 1.6m visitors.

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