85QT Sg Issuer 31

 

TIDM85QT 
 
RNS Number : 3138Q 
Broadgate Financing PLC 
02 August 2010 
 

 
                                                  02 August, 2010 
 
 
 Broadgate Financing PLC: Substitution of Assets in Broadgate Financing PLC and 
Bluebutton Properties Limited Agreement to Develop New UBS Building at Broadgate 
 
Bluebutton Properties Limited has signed an agreement for leases with UBS to 
develop a new 700,000 sq ft building on the Broadgate Estate.  As a result of 
this, Bluebutton Properties, advised by Eurohypo AG, has completed a 
substitution of assets within the Broadgate Financing PLC securitisation.  The 
properties subject to redevelopment 3, 4 & 6 Broadgate, have been removed from 
the securitisation and replaced with two high quality recently constructed 
properties, 201 Bishopsgate and Broadgate Tower. 
Securitisation transaction highlights: 
-    Substitution of 201 Bishopsgate and Broadgate Tower for 3, 4 & 6 Broadgate 
and GBP226 million of cash collateral. 
-    Substitution represents a significant net equity injection to the 
securitisation of GBP229 million by Bluebutton Properties. 
-    Secures UBS as a long-term anchor tenant on the wider Broadgate Estate 
-    Extensions of existing UBS lease agreements at 100 Liverpool Street and 1-2 
Finsbury Avenue generating additional contracted income of up to GBP68 million 
and increasing market value of properties. 
-    Weighted average lease length to first break extended by 1.9 years. 
-    New properties substituted are likely to have a higher residual value than 
amortising cash collateral. 
-    Scope for income growth through rent reviews and letting of vacant space in 
the new buildings. 
-    Significant reduction in future capital expenditure requirements by removal 
of older properties. 
-    Rating agency confirmation that the substitution will not adversely impact 
the current ratings of the securitisation. 
Transaction details: 
-    The substitution comprises the removal of 3, 4 & 6 Broadgate (including 
associated Henderson and AMBAC cash surrender collateral - GBP11 million) and 
the cash deposit of GBP215 million charged as security following the disposal of 
the Willis Building. 
-    201 Bishopsgate and Broadgate Tower have been substituted into the 
securitisation. Both properties were constructed in 2008 and provide 816,000 sq 
ft of lettable area with a combined valuation of GBP565 million as at March 
2010. 
-    201 Bishopsgate comprises 419,000 sq ft. It is 97% occupied with annual 
current contracted rent of GBP19.9 million and passing rent of GBP11.5 million 
due to rent free periods. The weighted average lease length to first break is 
16.2 years. Major tenants include Mayer Brown, Henderson, Landesbank 
Baden-Wurttemberg  and Bank of Nova Scotia.  As at March 2010, 201 Bishopsgate 
was valued at GBP310 million. 
-    Broadgate Tower comprises 397,000 sq ft. It is 73% occupied with annual 
current contracted rent of GBP13.5 million; due to rent free periods the passing 
rent is GBPnil. The weighted average lease length to first break is 11.3 years. 
Major tenants include Reed Smith LLP, Gill Jennings, Dickson Minto, Itochu, 
Greenlight, Liquidnet Europe and Regus. As at March 2010, Broadgate Tower was 
valued at GBP255 million. 
-    UBS has agreed to extend lease break options on 755,000 sq ft of space they 
currently occupy (comprising 1-2 Finsbury Avenue, 8-12 Broadgate and 100 
Liverpool Street) by an average of 24 months. The lease extensions, which are 
subject to planning consent for the new development being obtained, will 
generate additional contracted income of GBP68 million over the 24 month period. 
If planning consent is not obtained, the additional contracted rental income 
from lease extensions will be no less than GBP32 million. 
The Substitution demonstrates Bluebutton's continued strong commitment to the 
transaction and active management of the Broadgate Estate to the benefit of 
Bondholders. 
Enquiries 
 
British Land 
Simon Carter              020 7467 3492 
Sally Jones                  020 7467 2942 
Notes to Editors 
Bluebutton Properties Ltd 
Bluebutton Properties was established in 2009, and is a 50:50 joint venture 
between British Land and Blackstone funds. Bluebutton Properties is the parent 
company of the group which owns the Broadgate Estate, one of the premier City of 
London office estates, consisting of 16 buildings covering 4.4 million sq ft of 
Grade A office, retail and leisure space. 
Broadgate Financing PLC 
In March 2005, Broadgate Financing PLC, then a newly established ring fenced 
subsidiary of British Land issued GBP2.08 billion of Bonds supported by the cash 
flows from certain properties within the Broadgate Estate in the City of London. 
The properties currently securitised are: 1, 2 and 3 Finsbury Avenue; 1 and 2 
Broadgate and Broadgate Circle; 8-12 Broadgate and 100 Liverpool Street; 135, 
155 and 199 Bishopsgate; Exchange House; 10 Exchange Square; 1 Appold Street; 
Broadwalk House; the Broadgate Club; 201 Bishopsgate and Broadgate Tower. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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