Capital Shopping Centres (CSC) is to tap the bond market to refinance its short-term borrowings and top up its war-chest.

The group is offering £300m of senior unsecured convertible bonds due 2018, although, depending on demand, the size of the issue may increase to £350m.

The bonds are expected to carry a coupon (interest rate) of between 1.75% and 2.25% per annum. The initial price at which the bonds would convert into Capital Shopping Centres shares is expected to be set at a premium of between 30% and 35% above the volume weighted average price of the shares between the launch of the issue and pricing of same.

If not converted, redeemed or purchased and cancelled, the bonds will be redeemed at on October 4th, 2018.

In addition to the proposed convertible bond financing, CSC continues to review further options for financing the long-term growth plans of the business. Among the options being considered is the introduction of equity partners into major assets. CSC noted that around three-quarters of its portfolio is made up of properties where it is the sole owner.

Since releasing its interim results on July 26th, occupancy and footfall at its portfolio of stores have remained stable, the property company said.

JH

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