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Liberty International secures £525m refinancing for Lakeside Shopping Centre

London-based commercial property firm Liberty International (LSE: LII) has agreed a £525m refinancing of its key asset, the Lakeside Shopping Centre. A consortium of 7 European banks advanced the new 7 year, £525m loan facility. The refinancing deal extends the shopping centre’s next significant re-payment date until 2015.

The proceeds of the loan are being used together with the company's cash resources to redeem in full the current total outstanding loans of £545.8m secured on Lakeside otherwise repayable in July 2011. The repayments also include the redemption of the £445.8m of associated CMBS notes, at par. The existing loan has a current funding cost of about 5.5%.

"Liberty International is pleased to have agreed a significant long term bank financing and this speaks well of the quality of Lakeside and the strong support that the group enjoys from its banking relationships”, Liberty finance director Ian Durant said, “This 7 year loan substantially improves the group's overall debt maturity profile and refinances one of the group's largest debt maturities, leaving 2015 as the next significant date for repayment of CMBS related debt."

According to Liberty, the hedging arrangements of the new loan require progressively greater levels of interest rate protection over time and based on the current yield curve, they should see some interest savings during the initial years of the new loan. The funding was arranged by WestImmo and Eurohypo and the lenders are DekaBank, Eurohypo, Helaba, Lloyds, Pfandbriefbank, Santander and WestImmo.

The Lakeside shopping centre is owned and managed by Liberty’s subsidiary Capital Shopping Centres. Lakeside opened in 1990, the regional shopping centre provides 1.43m square feet of retail space.

Disclosure: The author holds no positions in the company