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Lehman Brothers is preparing to launch an L84m securitisation for Andrew Lloyd-Webber's Really Useful Theatre Group, backed by 13 theatres in London's West End.
The deal will refinance a loan made in January by Lehman's principal finance and securitisation group to finance the acquisition of 10 theatres from Stoll Moss Theatres. These venues were added to three owned by Lloyd-Webber's Really Useful Group to form a new company, The Really Useful Theatre Group (RUT).
Equity was provided by LloydWebber and NatWest Equity Partners, since renamed Bridgepoint Capital (see EW 645).
The transaction will be a long dated whole business securitisation, and is the first ABS issue in the sector. RUT is not directly exposed to the success or failure of productions, since its main revenues are flat rents paid by production companies to use the theatres. RUT also earns money from catering concessions. Its obligations are to maintain the theatres and provide ticketing services.
The credit strength of the deal will therefore rest partly on the theatres' market position - almost, their quality as real estate - and partly on management's ability to find productions to use them.
Investors will be betting on the continued...