Secured and unsecured debt

Secured debt

As at {NUM|Current Date}, the Group has secured debt of £{NUM|SECUREDDEBT} billion comprising secured debentures and other secured debt including

  • £{NUM|DEBOUT} billion of debentures issued by British Land are secured against a single combined pool of assets with common covenants. The covenant requires the value of those assets to cover the amount of these debentures by a minimum of 1.5 times and net rental income to cover the interest at least 1 times. We use our rights under the debentures to withdraw, substitute or add properties (or cash collateral) in the security pool, in order to manage these cover ratios effectively, deal with any asset sales and remedy if necessary
  • £{NUM|BANKDEBTSEC} billion of bank loans

Unsecured debt

As at {NUM|Current Date}, the Group had unsecured debt of £{NUM|UNSECDBT} billion comprising

  • £0.6 billion of US private placements, issued in full at fixed rates, requiring no amortisation and with terms up to {NUM|TERMONUSPPS} years. British Land has three US private placements: £200m Senior Notes 2026 swapped to an effective floating rate of 103 bps above Libor, £98 million 5.5% Senior Notes 2027 and $480 million issued in 4 series with different maturities, of up to 11 years (which is swapped back to sterling at an all in average cost of LIBOR + 146 bp). Issuing in this market widens the debt investor base
  • £{NUM|COMFAC-DRAWN-GRPO} billion of bank loans and overdrafts
  • £{NUM|CONVBOND} billion of convertible bonds

Covenants applying across each of these unsecured facilities (having been consistently agreed with all lenders since 2003) are the same:

  a) Net Borrowings not to exceed 175% of Adjusted Capital and Reserves
  b) Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets

No income/interest cover ratios apply to these facilities.

There are no other unsecured debt financial covenants in the Group.

The assets of the Group not subject to any security were £{NUM|NOSECINTEREST} billion as at {NUM|Current Date}.

Although secured assets and other assets of non-recourse companies are excluded from Unencumbered Assets for the covenant calculations, unsecured lenders benefit from the surplus value of these assets above the related debt and the free cash flow from them. During the year ended 31 March 2016 these assets generated £{NUM|SURPCASH} million of surplus cash after payment of interest and securitisation amortisation. In addition, while investments in joint ventures do not form part of Unencumbered Assets, profits generated by these ventures are passed up to the Group.

Derivatives, usually interest rate swaps, are used to achieve the required interest rate profile viewed across all the Group debt.

Open all