A&O acts for UBS Warburg on Sainsbury securitisation

Allen & Overy (A&O) has advised UBS Warburg as the lead manager on British Land Company’s £575m securitisation of
J Sainsbury’s supermarkets.
The deal comes on the back of British Land’s prestigious Broadgate office development in the City, launched in April 1999. In that transaction, A&O advised Morgan Stanley as the lead arranger.
The firm’s relationship with British Land, however, dates back to 1990, when it acted for UBS Warburg on a debt issue. The Broadgate deal merely consolidated the relationship.
British Land is expected to launch a third securitisation before the end of the year; so far it has shortlisted Goldman Sachs, Morgan Stanley, the Royal Bank of Scotland (RBS) Financial Markets and Schroder Salomon Smith Barney to lead manage the deal. A&O hopes to be instructed by the winner.
Simmons & Simmons, which advised British Land on the Broadgate deal, is also advising the company in the supermarket deal. However, British Land’s preferred adviser SJ Berwin is advising on the property side.
Despite the legal structure of the supermarket transaction being based on the Broadgate deal, the commercial structure has followed the Canary Wharf blueprint.
The transaction is a landmark because it is the first securitisation backed by buildings occupied by a single tenant to achieve a rating above the tenant’s corporate rating.
Sainsbury is rated A+/A by Fitch and Standard & Poor’s and yet the agencies rated £225m of the deal AA/AA.
A&O securitisation partner Christian Lambie said: “The single-tenant nature of this transaction presented a host of challenges, resulting in a commercial deal that was a long way from the original model.”
British Land set up as a special purpose vehicle which issued both secured and unsecured debt. The debt was then repackaged through an orphan company called Werretown Supermarkets Securitisations, which issued the bonds.
Securitisation partner James Bresslaw led the Simmons team and partner Stephen Willson led the SJ Berwin team. A&O also acted for Capita IRG Trustees as trustee.