Debt arranger to Aermont Capital in its acquisition of Pinewood Group plc, owner of the iconic Pinewood Studios and Shepperton Studios and as a result one of the preeminent providers of film studio space worldwide.
Financial advisor to Pinewood Group in its debt refinancing, in order to identify and evaluate all the potential debt refinancing options across the real estate finance and leveraged finance spectrums, and successfully execute the optimum one.
Financial advisor to Pinewood Group in its debt refinancing at a time of volatility due to an impending Brexit vote.
Our client participated in a bidding process to undertake a take-private acquisition of the AIM-listed Pinewood Group plc, an operating business / corporate backed by real estate. Pinewood’s core business model was to let film production related space to film studios on short-term hire agreements. The transaction was governed by the City Code on Takeovers and Mergers, including a requirement for ‘funds certain’ on submission of final bids and restrictions on the number of lenders simultaneously engaged by bidders.
Following the successful letting of newly constructed studios to Disney on the basis of a more traditional real estate lease, our client wanted to refinance the 2016 acquisition debt to reduce the overall cost of debt, have a more flexible financing structure and to also increase leverage to allow a sponsor/ shareholder dividend take-out.
Having let the predominant majority of its space exclusively to Disney and Netflix on the basis of more traditional real estate leases, our client wanted to refinance the existing debt to reduce the overall cost of debt further and also increase the leverage further to allow a sponsor/shareholder dividend take-out.
- We structured and sourced a highly innovative hybrid debt financing structure (£195m), combining a senior leveraged finance facility provided by 4 UK clearing banks and a mezzanine real estate finance facility provided by a debt fund which had no security over the underlying real estate or an intercreditor agreement with the senior lenders.
- We enabled the sponsor to achieve the desired leverage at a very competitive cost of debt (c.300 bps p.a. saving compared to next best alternative).
- We built in the ability for our client to increase the size of the senior facility post-acquisition, without requiring the consent of the mezzanine lender and without any increase in the cost of the mezzanine facility.
- Obtained terms for and fully evaluated 6 alternative debt financing strategies, with a recommendation to follow the High Yield Bond (HYB) route (£250m) which had not been previously considered by the client, plus a working capital / development facility (£50m).
- We managed the successful execution of the debut HYB which was many times oversubscribed, despite challenges such as niche business / asset class, small scale of business, GBP currency (less liquidity vs EUR) and small ticket size for a HYB.
- The overall cost of debt was substantially reduced despite the higher leverage.
- We managed the successful execution of the client’s second HYB (£550m) plus a working capital / development facility (£50m), doubling the total debt amount.
- HYB was again many times oversubscribed, despite large size for a GBP issuance and political headwinds, subsequently winning the IFR award for 2019 Europe High-Yield Bond (despite competing with much larger EUR issuances in a much more liquid EUR market).
- The overall cost of debt was again reduced despite the further increase in leverage.
Bloomberg – U.K. Film Studio Enlists James Bond and Harry Potter for Its Junk-Bond Pitch
The Business Magazine – Pinewood Group to be acquired by Bidco through Aermont Capital
Skynews – Bond Studio Pinewood In £300m Takeover Talks
Costar – Five lenders club together to finance £400m+ Pinewood & Shepperton acquisition
EuroProperty – €794m of deals reignite Europe’s debt Markets
Global Capital – Action! Pinewood Studio debuts
Nasdaq – Pinewood lands bond, high-yield bond
Bloomberg – Harry Potter and 007 Defy a Credit Market Battered by Brexit
IFR – Bond, high-yield bond