Wednesday, March 12, 2008

Marks & Spencer Enters $403 Million Sale Leaseback of Property Portfolio

Global Pensions - March 10, 2008

Marks & Spencer has said it would put £200m (US$403m) into its defined benefit pension scheme over the next three years by increasing the amount of property, the fund had in its portfolio.

Marks & Spencer said it would place additional M&S properties into the fund with a current market value of approximately £400m. The decision was part of the funding plan agreed with the pension trustees to address the scheme’s deficit.

The properties would be leased back to Marks & Spencer and the fixed annual distribution profits to the pension fund would be increased from £50m to approximately £72m for the remaining 14 year period.

The arrangements enabled Marks & Spencer to fund the £200m contribution at an effective financing rate of approximately 6.1%.

The fund would also hold the enhanced partnership interest as part of its total investment portfolio. This would be worth around £700m and represent the net present value of the future distributions. Sphere: Related Content

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