Intu Memo 210920
- Understand our valuations of each of Intu’s shopping centres and PropCos and resulting recoveries for secured debt at Intu (SGS), Trafford Centre, Intu Debenture, Intu Metrocentre, Other PropCos and the Intu Jersey Two Ltd senior unsecured convertible
- Understand how our valuation models for each PropCo capture migration of leases to turnover leases on lease expiration built from bottom-up forecasts of tenants’ revenue as well as the impact on net rental income from CVAs, administrations, renewals and vacancies
- Understand the debt structures at each of Intu’s PropCos – PropCo group structures, transaction structures, security, events of default and enforcement; cash flow waterfall for CMBS Notes issued out of The Trafford Centre Finance Limited; capitalisation and credit metrics
- Understand our credit risk assessment of each of the PropCos key tenants including cash flow forecasts and liquidity
- Our estimated shopping centre valuations with sensitivities to capitalisation rates for: Trafford Centre, Lakeside, Braehead, Watford, Victoria Centre, intu Eldon Square, intu Potteries / Soar at Braehead, Metrocentre, intu Merry Hill, intu Milton Keynes, St David’s, intu Chapelfield, intu Derby, intu Xanadu, intu Uxbridge, Manchester Arndale and Cribbs Causeway
- PropCo valuations for: Intu (SGS), Trafford Centre, Intu Debenture, Intu Metrocentre and Other PropCos
- For each PropCo: forecasts for net cash rental income out to 2025 and split thereof between turnover leases and fixed leases; forecasts for unleveraged FCF
- Square footage data for key tenant’s stores in each Intu centre vs their average estate-wide
- Financial projections for key tenants – Next, River Island, JD Sports, Primark UK, H&M UK, Boots UK, Debenhams, Arcadia Group, Dixons Carphone
- What are the “cash cents costs” that appeared for the first time in Intu’s cash flow projections for each PropCo released on 2/6/20 and to what extent is unleveraged FCF at each PropCo impacted by this drag?
- How tight is liquidity at each PropCo?
- How do our forecasts for unleveraged FCF by PropCo compare with those provided for H2 20 and FY 21 by Intu on 2/6/20 just prior to its administration?
- Could the recovery on the Intu Jersey Two Ltd senior unsecured convertible be significantly higher than its current market price and that implied by the administrators’ Statement of Affairs for Intu Properties Plc?
- Are the Trafford Centre Class A and B Notes more equity-like in their risk profile than the market currently recognises?
- How vulnerable are Intu (SGS) Senior Secured Notes to capitalisation rates above 6.5% given our forecasts for unleveraged FCF?