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Canary Wharf has secured bondholder approval for a £610m refinancing plan as the east London landlord nears the end of a series of high-stakes finance deals.
Canary Wharf Groupwhich owns and operates large parts of London’s Docklands financial hub, wants to take out £610m in new bank loans secured by its vast underground shopping centers 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 new debt. Bondholders have given their consent, according to a statement issued on Wednesday.
The bonds are the latest part of a convoluted series of deals to fix the landlord’s balance sheet against a backdrop of much higher debt costs, reduced property values and concerns about the estate’s ability to attract and retain anchor tenants.
Completing the deal would leave CWG with no major debt maturities before 2028, giving the company room to adjust to the post-pandemic office market.
Leading tenants HSBC, Clifford Chance and Moody’s have announced plans to leave the property, while Morgan Stanley and Barclays have extended their stay in smaller premises. Fintech Revolut is expanding into a new headquarters on the property.
To support CWG’s pitch to bondholders, Brookfield is pledged up to £900m of capital to pay off two bonds — with the third due in 2028 — if necessary, effectively guaranteeing refinancing.
QIA decided not to co-sign the £900m backstop, saying it could do so later.
QIA and Brookfield jointly injected £300m of cash into the company last year and secured a £100m loan, helping CWG navigate a complex series of refinancing deals this year for asset-backed loans.
With commercial real estate prices plummeting, especially for office buildings, CWG, like other landlords, had to pay off those loans to secure the extension. The group’s loan-to-value ratio continues to climb to 53 percent, above its self-imposed target of 50 percent, as the value of the portfolio fell.
Canary Wharf’s 1.2m sq ft retail and entertainment portfolio, valued at £1.2bn, has benefited from record footfall at the property, which has positioned itself as a shopping destination for people in the surrounding East London areas — not just a convenience for office workers .
