Freeman News - February 24, 2006
J Sainsbury plc, Britain's third biggest supermarket group, is to issue £2.07bn of commercial mortgage-backed securities to cut financing costs and slash its ££582m pension deficit. Sainsbury is to plough £350m into its pension schemes over the next three months. Sainsbury will use the balance of the proceeds to buy back up to £1.7bn in outstanding debt.
It said the CMBS will enable it to cut interest payments by £12m a year from next year. The debt will be secured indirectly against 127 of its supermarkets with a value of £3.55bn, approximately half the net book value of its estate
Sainsbury will incur a pre-tax charge of £37m this year, partly to pay for the early redemption of the existing unsecured bonds, rated BBB- and Baa3 respectively by Standard & Poors and Moody's.
(see Moody's Investors Service presale reports at the links below)
Longstone Finance plc
Eddystone Finance plc
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Friday, February 24, 2006
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