MEPC PREPAYS £102M OF £470M CMBS

Proactive re-financing reduces gearing and positions MEPC for future activity.

MEPC, the developer and owner of eight Business Estates across the UK, announced today that it will prepay £102m of the £470m loan securitised via Opera Finance (MEPC) plc, on the next interest payment date on 20 January 2011, in advance of maturity in July 2012. The CMBS, completed in November 2005 and arranged by Eurohypo AG, is secured against four of MEPC’s business parks - Milton Park in Oxfordshire, Birchwood Park in Warrington, Chineham Park in Basingstoke and Hillington Park in Glasgow, currently valued at £619m.

This prepayment is part of a wider financing strategy to address the early repayment of the securitised loan before its maturity in July 2012.

As a consequence of this prepayment, Birchwood Park will be released from the securitisation. MEPC will use a combination of cash from recent disposals alongside a new five year facility of £62m from Eurohypo AG secured against Birchwood Park to repay the £102m of the £470m CMBS.

As a result of the prepayment the loan to value ratio of the securitised loan reduces to 74%, and interest cover remains at 192%.

Rick de Blaby, Chief Executive of MEPC said; “MEPC’s early repayment of part of the CMBS Notes underscores both the company’s robust financial position and prudent debt management strategy. It was always our intention to proactively address the refinancing ahead of maturity, reduce the gearing and position ourselves for a new phase of activity and performance. Our valued long term relationship with Eurohypo is important in those aims.’

Michael Acratopulo, Head of Origination at Eurohypo commented, ‘The new bank debt facility for Birchwood Park is a good quality asset for Eurohypo and also assists MEPC in their refinancing strategy. We are delighted to be working with an existing client in this way.’

Caroline Philips, Head of Structured Debt at Eurohypo observed, ‘MEPC’s pro-active management of their debt marks an important step in the refinancing of the Opera MEPC CMBS issue, and underlines the quality of the Opera platform.’