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Canary Wharf has secured bondholder approval for a £610mn refinancing plan, as the east London landlord nears the end of a high-stakes series of financing deals.
Canary Wharf Group, which owns and manages large parts of London’s docklands financial centre, wants to take £610mn in new bank loans secured against its vast underground shopping centres in order to refinance two bonds due in 2025 and 2026.
The landlord, owned by Brookfield and the Qatar Investment Authority, needs approval from those bondholders to raise the new debt. Bondholders have given their consent, according to a statement on Wednesday.
The bonds are the last piece of an intricate series of deals to tidy up the landlord’s balance sheet against the backdrop of much higher debt costs, diminished property values and questions over the estate’s ability to attract and retain anchor tenants.
Completing the deal would leave CWG with no major debt deadlines before 2028, giving the company breathing space to adapt to the post-pandemic office market.
Flagship tenants HSBC, Clifford Chance and Moody’s have all announced plans to leave the estate, while Morgan Stanley and Barclays have extended their stay in smaller premises. Fintech Revolut is expanding into a new headquarters on the estate.
To support CWG’s pitch to bondholders, Brookfield has promised up to £900mn of equity to pay off the two bonds — with a third due in 2028 — if required, in effect guaranteeing the refinancing.
QIA has opted not to co-sign the £900mn backstop, saying it may do so at a later date.
QIA and Brookfield jointly injected £300mn of cash into the company last year, and provided a £100mn credit facility, which has helped CWG navigate a complex set of refinancing deals this year on loans tied to specific assets.
Given the sharp decline in commercial property prices, especially for office buildings, CWG like other landlords has had to pay down these loans to secure extensions. The group’s loan-to-value ratio has still edged up to 53 per cent, above its self-imposed 50 per cent target, as the value of its portfolio fell.
Canary Wharf’s 1.2mn sq ft retail and leisure portfolio, valued at £1.2bn, has benefited from record footfall to the estate, which has positioned itself as a shopping destination for people in surrounding areas of east London — rather than just an amenity for office workers.
