Non recourse to British Land

Our joint ventures and funds are each financed and interest rate managed separately and without recourse to British Land for repayment. The debt has been arranged through securitisation or bank debt specifically according to the requirements of the business of each venture.

As at 31 December 2011, our share of the total debt of our joint ventures and funds was £2.7 billion of which £1.8 billion was accounted for by securitisations and the balance by bank debt.

Those debt arrangements which include loan to value ratio covenants have maximum levels of between 55% and 90% (except one fund in which we have a small interest where the LTV is 35%). Several have rental income to interest or debt service cover requirements. There is no obligation on British Land to remedy any of these covenants and any remedy would be considered by the parties on a case by case basis.

Securitisations

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Three of our major joint ventures are financed by securitisations: Broadgate, Meadowhall and the Sainsbury’s superstore portfolio.

Securitisations are used to raise long-term debt based on the cash flows generated from specific assets or pools of assets. The debt raised in this way is credit rated. The principal is repaid quarterly with the balance outstanding reducing to approximately 20% - 30% of the original amount raised by the final maturity.

The securitisations have no loan to value covenants. The only financial covenant applicable to the securitisations is that income (broadly net rental income and amounts released from cash collateral) must cover 100% of interest and scheduled amortisation (debt repayment).

As at 05 January 2012, the Broadgate securitisation had £1.859 billion of securitised bonds issued with a weighted average maturity of 14.8 years and a weighted average interest rate of 5.01% supported by the cashflows from certain parts of the Broadgate Estate in the City of London. For more information see joint venture securitisations

As at 12 January 2012, the Meadowhall securitisation had £790 million of securitised bonds issued with a weighted average maturity of 13.1 years and weighted average interest rate of 4.98% supported by the cashflow of the Meadowhall shopping centre. For more information see joint venture securitisations

As at 04 January 2012, the Sainsbury superstore securitisation had £634 million of securitised bonds issued with a weighted average maturity of 9.5 years and a weighted average interest rate of 4.94% secured on the cashflows of the superstore portfolio, which comprises 37 stores. For more information see joint venture securitisations

Debentures

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Debentures without recourse to British Land are those issued by BLD Property Holdings Limited (formerly Asda Property Holdings Limited) a company acquired by the Group in 2006. There are two fixed rate debentures of £73 million in total at 31 December 2011. Asset value and income cover ratio requirements are managed and remediable as necessary in line with our other debentures.

For more detailed information on these securitisations, see: