Issue & Restructuring of Debt

British Land Co PLC
21 July 2006


                          THE BRITISH LAND COMPANY PLC


                                                                    21 July 2006


            BRITISH LAND ANNOUNCES £1 BILLION DEBENTURE RESTRUCTURING


The British Land Company PLC (the "Group" or "British Land") today announces its
plans for a restructuring of its existing Group debentures to create a market
leading, multi-tranche £1 billion debenture (1) with a common security pool and
covenants. The proposed transaction (the "Proposed Transaction") will deliver
benefits to both British Land and its debentureholders.


For debentureholders this restructuring will create the largest individual UK
debenture security pool and is expected to improve the liquidity of the
debentures given the overall enlarged size, improved covenants and enhanced
transparency.  In addition holders of BL Universal PLC ("BLU") debentures will
benefit from an upgrade of the obligor to British Land.  Shareholders will
benefit from re-couponing to give a lower average interest cost on the new
debentures and as such British Land will have increased dividend cover and
distribution flexibility.  In addition British Land will benefit from the
creation of a simplified, uniform secured debt structure for the non-securitised
part of the Group.



Highlights

  • The Existing 2028 Debentures and Existing 2019/24 Debentures will be
    redeemed by the issue of New 2028 Debentures and the Existing 2035
    Debentures will be redeemed by the issue of New 2035 Debentures, both with
    current market coupons (2)

  • Debentureholders will benefit from one common and enlarged security pool
    initially valued at approximately £1.8 billion

  • The New Debentures will benefit from a new information and a new change of
    control covenant

  • The current obligor under the Existing BLU Debentures will be upgraded to
    British Land and benefit from the same common security pool and same
    covenant package

  • British Land will make a pre-tax exceptional charge of £256 million (3)
    mainly due to the difference between the redemption value and book/nominal
    value of the existing debentures

  • EPRA adjusted NAV will be reduced by 34 pence per share; there will be
    virtually no effect on NNNAV

  • The Group's annual interest costs will be reduced by approximately £11
    million

  • The Group's weighted average cost of debt will be reduced from 5.71% to
    5.39%


Commenting on the Proposed Transaction, Graham Roberts, Finance Director of The
British Land Company PLC, said: "Following on from the successful BL Superstores
and Broadgate restructurings, these proposals again reflect British Land's
commitment to finding optimal long-term structures to benefit both lenders and
shareholders.  These proposals will give the debentures the benefits of a common
security pool and improved covenants while allowing shareholders to benefit from
a reduced annual interest cost.  We recommend our debentureholders to vote in
favour in line with the endorsement given by the Special Committee of the ABI".


Enquiries:

The British Land Company PLC

Graham Roberts, Finance Director                          Tel.: [phone]
Peter Clarke, Executive Officer                           Tel.: [phone]

The Royal Bank of Scotland

Robert St. John, Managing Director                        Tel.: [phone]
Andrew Burton, Head of Liability Management               Tel.: [phone]

UBS Investment Bank

Andrew Dennis, Executive Director                         Tel.: [phone]
Duane Hebert, Executive Director                          Tel.: [phone]


Finsbury

Faeth Birch                                               Tel.: [phone]


1 Throughout this announcement, calculations are based on current pricing and
assume all investors choose to redeem, rather than retain the Existing 2028
Debentures and Existing 2035 Debentures.

2 Holders of the Existing 2028 Debentures and the Existing 2035 Debentures will
also be given, to a limited extent, the option to retain their existing
debenture holdings at the current 9.375% and 8.875% respective coupons, whilst
the terms of such existing debentures will be amended to benefit from the new
common security pool and the new covenants.

3 Throughout this announcement, the financial effects of the Proposed
Transaction on British Land are stated on a pro forma basis as though it were
completed on 31 March 2006.


Background


British Land continually seeks to optimise its debt portfolio for the benefit of
both its shareholders and its lenders. As part of this policy the Group has
decided to restructure its debenture issues. British Land and BLU have, between
them, six outstanding debentures with an aggregate nominal value of £783m and
coupons ranging from 6.75% to 11.375%.



The British Land Debentures (the "Existing BL Debentures")


•  £200m 9.375% First Mortgage Debenture Stock due March 2028 (the "Existing 
   2028 Debentures")

•  £250m 8.875% First Mortgage Debenture Bonds due September 2035 (the "Existing 
   2035 Debentures")

•  £12.6m 10.5% First Mortgage Debenture Stock due September 2019/24 (the 
   "Existing First 2019/24 Debentures")

•  £20.4m 11.375% First Mortgage Debenture Stock due September 2019/24 (the 
   "Existing Second 2019/24 Debentures", and together with the Existing First
   2019/24 Debentures the "Existing BL 2019/24 Debentures")


The BLU Debentures (the "Existing BLU Debentures")


•  £100m 6.75% First Mortgage Debenture Bonds due March 2011 (the " Existing 
   2011 BLU Debentures")

•  £200m 6.75% First Mortgage Debenture Bonds due March 2020 (the " Existing 
   2020 BLU Debentures")


The Proposed Transaction


Under the Proposed Transaction, British Land will create a market-leading
debenture structure, with all debentures issued by British Land, secured on an
increased common security pool initially valued at approximately £1.8 billion,
which will benefit from a new change of control clause and a new detailed
information covenant.


British Land is offering holders of the Existing 2028 Debentures, Existing 2035
Debentures and Existing 2019/24 Debentures new current coupon debentures
totalling approximately £728 million by way of redemption of their Existing BL
Debentures. At the same time, British Land proposes to the holders of the
Existing BLU Debentures to substitute The British Land Company PLC for BLU as
the obligor under the Existing BLU Debentures through a consent solicitation.



The new tranches following the restructuring (the "New Debentures") will be as
follows:



  • £100 million 6.75% 2011 debentures

  • £200 million 6.75% 2020 debentures

  • Approximately £349 million 5.440% 2028 debentures (the "New 2028
    Debentures")

  • Approximately £379 million 5.348% 2035 debentures (the "New 2035
    Debentures")



Full details of this transaction are contained in the Consent Solicitation
Document (containing a Preliminary Prospectus in respect of the 2011 Debentures,
2020 Debentures, New 2028 Debentures and New 2035 Debentures) published by
British Land and BLU today, setting out proposals to the debentureholders (the "
Proposals") and setting out terms for the New Debentures.



Approval will be sought by way of Extraordinary Resolutions to be considered and
if thought fit approved in meetings of holders of each series of the Existing BL
Debentures and Existing BLU Debentures through a consent solicitation.


The Proposals



The 2028 Debentures and 2035 Debentures



British Land offers each eligible holder of the Existing 2028 Debentures and
Existing 2035 Debentures by way of redemption of their current debentures two
new current coupon (expected to be approximately 5.440% and 5.348% respectively
but to be determined at the time of the pricing) debentures with the same
nominal amounts and the same maturities as previously held.



In addition, British Land proposes to pay holders of the Existing 2028
Debentures and Existing 2035 Debentures a cash payment to compensate for the
value of the mark-to-market premium of those current debentures above their
nominal amount. The cash amount will be financed by a tap issuance of additional
New 2028 Debentures and New 2035 Debentures to be purchased by The Royal Bank of
Scotland and UBS Limited.



British Land will also give holders of the Existing 2028 Debentures and the
Existing 2035 Debentures the option to retain their existing debenture holdings
with their existing respective 9.375% and 8.875% coupons. The terms of their
current debentures will be amended so that they benefit from the new common
security pool and the new covenants, but their existing debentures will not be
redeemed, reissued or otherwise reconstituted and there will be no change to
their coupon (and hence no cash payment in respect of the mark-to-market
premium) or nominal value of the debenture. Under the Proposals, a minimum of
£2m and a maximum of £30m of the Existing 2028 Debentures and a minimum of £2m
and maximum of £50m of the Existing 2035 Debentures can opt for the alternative,
although this condition might be waived. Debentureholders taking this option
will, however, receive a lower level of incentive fees.



The 2019/24 Debentures



British Land offers each eligible holder of the Existing 2019/24 Debentures the
opportunity to redeem their existing holdings and receive in return New 2028
Debentures. This will be structured as a redemption of the existing debentures
at market value, with the redemption price being settled by delivery, to
eligible holders, of the New 2028 Debentures in a principal amount equal to the
market value price, so that holders will be compensated for the premium value of
the Existing 2019/24 Debentures by the delivery of additional New 2028
Debentures.



The BLU Debentures



The nominal amounts, coupons, and maturity dates of the Existing BLU Debentures
will remain unchanged. However, under the Proposed Transaction, British Land
would assume all of the obligations of BLU under the Existing BLU Debentures
(and BLU will be released from its obligations). The New 2011 Debentures and New
2020 Debentures will benefit from the common security pool and improved covenant
package.


Following the Proposed Transaction, it is expected that the total nominal value
of outstanding debentures will be approximately £1,028 million.

Indicative terms of the Proposals


Under the Proposals, the yield at which the Existing 2028 Debentures, Existing
2035 Debentures and Existing 2019/24 Debentures will be redeemed will be equal
to the sum of the relevant Mid-Market Benchmark Security Rate on the Pricing
Date and the applicable fixed spread as stated in the table below.



Subject to certain exceptions, the redemption price will be settled, by delivery
to the holders of Existing BL Debentures, of the New 2028 Debentures and New
2035 Debentures and a cash payment to compensate for the premium value of the
Existing 2028 Debentures and Existing 2035 Debentures above the nominal amount.
The cash amount will be financed by additional issuance of New 2028 Debentures
and New 2035 Debentures. Indicative terms of the Proposals to Existing BL
Debentureholders are summarised in the table below, assuming all
debentureholders choose to re-coupon:

                                                                                                                      
               Existing Securities                                    New Securities                       Cash      
                                                     New Securities                                               

 Government  Security     Size    Spread       Price      Issue      Size    Issue   Coupon  Maturity    (%)    (£m)  
 Benchmark                (£m)    over         (%)     Price (%)    (£m)    Spread    (%)                             
                                  Benchmark                                                                       
                                                                                                                      
  UKT 6%     9.375% due   200.0    G + 105    149.62     100.00     200.0  G +105    5.440    Mar 28    49.62   99.2  
  Dec-28     Mar 2028                                                        
 
 UKT        8.875% due   250.0    G + 110    151.72     100.00     250.0   G +110    5.348    Sep 35    51.72   129.3 
  4.25%      Sep 2035                                                        
  Mar-36                                                                                                              

  UKT        10.500%      12.6     G + 100    145.36     100.00     18.3    G +105   5.440    Mar 28    0.00    0.00  
  4.75%      due Sep                                                                                                  
  Mar-20     2019/24                                                                                                  
  UKT        11.375%      20.4     G + 100    153.42     100.00     31.3                                              
  4.75%      due Sep                                                                                                  
  Mar-20     2019/24                                                                                                  


Incentive Fees


Holders consenting to redeem their Existing BL Debentures and receive New
Debentures will be paid incentive fees as set out in the table below if they
submit voting instructions before the relevant Deadlines, subject to the
Extraordinary Resolutions being approved. Holders of the Existing 2028
Debentures and Existing 2035 Debentures choosing to retain their existing
holdings at the existing coupon will only be entitled to an Early Submission Fee
and will not be entitled to an Amendment Fee (see below):

Existing BL Debentures                   Early Submission Fee                    BL Amendment Fee

                                    Approx. bps     Expressed as % of     Approx. bps     Expressed as % of
                                   running yield     nominal amount      running yield     nominal amount

2028 Debentures                         1.0               0.17%               4.0               0.68%

2035 Debentures                         1.0               0.20%               4.0               0.82%

First 2019/24  Debentures               1.0               0.12%               4.0               0.48%

Second 2019/24  Debentures              1.0               0.12%               4.0               0.49%


Holders of the Existing BLU Debentures will be paid the following incentive fee
if they submit voting instructions before the relevant Deadlines, subject to the
Extraordinary Resolutions held at two separate meetings and at the joint meeting
of holders of the Existing BLU Debentures being approved:



  • The holders of the two Existing BLU Debentures will vote at a joint
    meeting on the main amendments.
  • The holders of the two Existing BLU Debentures will also vote at two
    separate meetings of each series thereof to provide solely for the
    modification of the early redemption provision such that it is to be
    calculated with reference to their respective European Investment Bank
    benchmark securities rather than their respective UK gilt-edged securities.


Existing BLU Debentures                  Early Submission Fee                    BLU Amendment Fee
                                    Approx. bps     Expressed as % of     Approx. bps     Expressed as % of
                                   running yield     nominal amount      running yield     nominal amount

2011 Debentures                         1.0               0.04%               1.5               0.06%

2020 Debentures                         1.0               0.10%               1.5               0.15%


Expected timetable


Date                        Event

21 July 2006 (Fri.)         Announcement / launch of transaction
                            Notice of meetings sent to Debentureholders

11 August 2006 (Fri.)       Early Submission Deadline and Revocation Deadline (12 noon UK)

17 August 2006 (Thu.)       Expiration Date (3 p.m. UK)

21 August 2006 (Mon.)       Meetings

22 August 2006 (Tue.)       Confirmation Date and Pricing Date

29 August 2006 (Tue.)       Settlement Date


The Consent Solicitation Document



The Consent Solicitation Document contains notices convening meetings of the
holders of each class of the Existing BL Debentures and Existing BLU Debentures
to be held on or around 21 August 2006 to consider and, if thought fit, approve
Extraordinary Resolutions to effect the Proposals.  Subject to the Proposals
being approved, and the conditions specified in the Consent Solicitation
Document being satisfied or (if capable of being waived) waived, holders of the
Existing BL Debentures and Existing BLU Debentures who deliver valid voting
instructions as required by the Consent Solicitation Document (which, subject as
provided in the Consent Solicitation Document, are not subsequently revoked or
withdrawn) before 12 noon on 11 August 2006 (the "Early Submission Deadline")
will be entitled to receive a fee payable in cash (the "Early Submission Fee").
The Expiration Date for the holders of the Existing BL Debentures and Existing
BLU Debentures to submit completed voting instructions in order to vote at the
meetings and receive the Amendment Fee is 17 August 2006. The Proposed
Transaction is expected to close on 29 August 2006.


Effects on holders of Existing BL Debentures


Holders of the Existing BL Debentures will benefit from an enlarged, more
diverse security pool initially valued at approximately £1.8 billion, expected
to provide an improvement in liquidity through additional transparency and
increased tranche sizes in most cases. The re-couponing of the Existing BL
Debentures will mark-to-market the premium value above par and gives investors
current coupon debentures; the increase in the nominal outstanding value
requires British Land to provide initially an additional £165m of collateral as
security to cover investors' current mark-to-market premium. Holders will enjoy
an improved covenant package including a new information covenant and a new
change of control clause. An Amendment Fee will be paid to all voting holders of
the Existing BL Debentures assuming a successful conclusion. In addition,
holders of the Existing 2028 Debentures and the Existing 2035 Debentures have
the option to retain their existing holdings with their existing respective
8.875% and 9.375% coupons, with the terms of their current debentures amended so
that they benefit from the new common security pool and the new covenants,
albeit whilst only being eligible to receive the Early Submission Fee, subject
to the Extraordinary Resolutions being approved.

Effects on holders of Existing BLU Debentures


The holders of the Existing BLU Debentures will benefit from the upgrade of
obligor to British Land, being a more substantial entity, whilst maintaining
identical nominal amounts, coupons and maturity dates. In addition, they will be
able to enjoy the benefits of an enlarged security pool initially valued at
approximately £1.8 billion, providing additional diversity and expected
improvements in liquidity due to the transparency of a single British Land asset
pool and the same improved covenant package applicable to the Existing BL
Debentures. An Amendment Fee will be paid to all voting holders of the Existing
BLU Debentures assuming a successful conclusion.

The Special Committee of the ABI


A Special Committee of the Association of British Insurers, consisting of five
members, representing approximately 48% of the principal amount outstanding of
the Existing BL Debentures and 55% of the principal amount outstanding of the
Existing BLU Debentures, has considered the Proposals. The members of the
Special Committee have indicated that they find the Proposals acceptable, that
they intend to vote in favour of the Proposals in respect of their holdings and
that they will be inviting other ABI members to consider a similar course of
action.

Impact on The British Land Company PLC


The financial impact on the Group of the Proposed Transaction will depend on the
nominal amount of Existing BL Debentures held by debentureholders who decide to
receive the New 2028 Debentures and New 2035 Debentures and market interest
rates at the date the proposed transaction completes.  The financial impacts
shown below assume all debentureholders chose to re-coupon their Existing 2028
Debentures and Existing 2035 Debentures.



As a result of the Proposed Transaction, the Group could incur a pre-tax
exceptional charge of £256 million, mainly due to the difference between the
redemption value and book/nominal value of the Existing BL Debentures. However,
the Proposed Transaction is expected to result in a recurring annual positive
impact on pre-tax profits of £11 million (£8 million after tax) and to reduce
the weighted average cost of all debt secured on the portfolio from the current
8.28% to approximately 5.79%. British Land's ongoing headline cost of debt will
decrease overall on a pro forma basis from 5.71% to 5.39%.



The impact of the exceptional charge will be to reduce EPRA adjusted net asset
value ("NAV") by £179 million, equivalent to 34 pence per fully diluted share.
However, there will be virtually no effect on the Group's NNNAV, 'triple net'
asset value, that is, broadly, adjusted net asset value less the post-tax mark
to market of debt and derivatives and less contingent capital gains tax.



The common security pool will lower the debt management and administration costs
as well as creating a uniform secured debt structure outside the securitised
financing of the Group.

Important Notice


The contents of this press release, which have been prepared by and are the sole
responsibility of British Land, have been approved by UBS Limited, a subsidiary
of UBS AG ("UBS") solely for the purposes of section 21(2)(b) of the Financial
Services and Markets Act 2000.  UBS, together with The Royal Bank of Scotland
plc ("RBS"), are acting for British Land and BLU in connection with the Proposed
Transaction and no one else, and will not be responsible to anyone other than
British Land and BLU for providing the protections offered to clients of UBS 
and/or RBS nor for providing advice in relation to the Proposed Transaction. The
address of UBS is 1 Finsbury Avenue, London, EC2M 2PP.



This press release does not constitute an offer to sell or the solicitation of
an offer to buy securities of British Land or BLU. Nothing in this press release
constitutes advice on the merits of buying or selling a particular investment or
exercising any right conferred by the securities described herein.



Any investment decision as to any purchase of securities referred to herein must
be made solely on the basis of information contained in the final form of the
Prospectus of The British Land Company PLC and no reliance may be placed on the
completeness or accuracy of the information contained in this press release.



Securities are not suitable for everyone. The value of securities can go down as
well as up.  You should not deal in securities unless you understand their
nature and the extent of your exposure to risk.  You should be satisfied that
they are suitable for you in the light of your circumstances and financial
position.  If you are in any doubt you should consult an appropriately qualified
financial advisor.

Notes to editors:


The British Land Company PLC is one of the UK's biggest property companies with
£18 billion of gross property assets owned and managed.  It is based in London
and listed on the London Stock Exchange, investing in prime, modern properties.


The Group's portfolio is valued at £14.4 billion: the majority is directly owned
and managed; the balance is held in joint ventures, partnerships and funds, of
which the Group's share is valued at £2.6 billion. Of the total Group portfolio,
approximately £1.8 billion will be secured against the New Debentures and any
retained Existing 2028 Debentures and Existing 2035 Debentures, assuming the
Proposals are approved. Additional Group properties are held within
securitisations, including the Broadgate, Meadowhall and BL Superstores
portfolios.


The £200 million 9.375% 2028 First Mortgage Debenture Stock were launched in
April 1993; the £250 million 8.875% 2035 First Mortgage Debenture Bonds in
September 1995; the £100 million 6.75% 2011 and £200 million 6.75% 2020 First
Mortgage Debenture Bonds in March 1998; the £12.6 million 10.5% 2019/24 First
Mortgage Debenture Stock in March 1986; and the £20.4 million 11.375% 2019/24
First Mortgage Debenture Stock in August 1991.



UBS Limited is acting as Lead Manager in connection with the Proposed
Transaction, and together with the Royal Bank of Scotland plc, both parties are
acting as Joint Solicitation Agents and Joint Bookrunners in connection with the
Proposed Transaction.


                      This information is provided by RNS
            The company news service from the London Stock Exchange