Commercial Finance Specialists

Tesco is to use a commercial mortgage-backed securities scheme to release £950 million from its UK property investment holdings.

Supermarket giant Tesco is looking to release around £950 million from its commercial development assets in the largest action of its kind since the UK went into recession, it is claimed.

The 30-year commercial mortgage-backed securities are backed by rents on a portfolio of 41 stores nationwide.

HSBC and Goldman Sachs are handling the sale through Tesco Property Finance Three, with the bonds being given a provisional rating of A3 by rating agency Moody's.

Third-party valuers put the market value of the portfolio at £924 million, giving a net yield of 4.99 per cent.

This commercial mortgage-backed securities project is the fourth of its kind that Tesco has undertaken, with the third finishing in September 2009.

In total, the three previous actions raised Britain's biggest retailer about £2 billion, the Financial Times notes.

The supermarket chain recently announced that's its pioneering chief executive Terry Leahy will step down next year after 14 years at the helm.

Posted by Tess Nelson.