International law firm Freshfields Bruckhaus Deringer has advised McCarthy & Stone, the UK’s leading retirement homes developer, on its successful rights issue and refinancing of its existing liabilities, totalling £518.9m. The transaction significantly reduces the Company’s debt by £350m.
As part of the transaction, existing shareholders of the Company have subscribed for £367m of new equity. The outstanding debt has been refinanced by a new £160m five-year loan facility, also provided by existing shareholders, all of whom are committed to supporting the long-term growth of the Company. The £527m proceeds raised have been used to pay down McCarthy & Stone’s outstanding liabilities and associated costs. This includes repayment of £510.3m in loans and an £8.6m swap.

With this refinancing successfully completed, the Company will now focus on delivering on its growth strategy. McCarthy & Stone has allocated £1.5bn to investing in land and build through to 2018. The Company has plans to acquire around 250 sites across the UK over this period and to commence construction of a similar number of new developments.

The Freshfields team was led by partners Richard Tett with Farah Ispahani and Jeffrey Rubinoff. The Freshfields team worked closely with the McCarthy & Stone in house legal team led by John Davies, Head of Legal and Company Secretary.

Commenting on the transaction, Freshfields finance partner Richard Tett said: ‘The rights issue and refinancing is excellent news for McCarthy & Stone. We were delighted to work along side John Davies and his team to help deliver the transaction. With this strong shareholder financial support, McCarthy & Stone has been put onto a strong financial footing. McCarthy & Stone can focus on investing in new developments and growing its business. As signs of a house market recovery emerge, McCarthy & Stone is extremely well placed to take advantage of the opportunities that come.’