West Edmonton Mall Property completes C$600 million defeasance of its 5.66% first mortgage bonds

On February 13, 2014, West Edmonton Mall Property Inc. (WEMPI) completed the defeasance of approximately $600 million of its 5.66% first mortgage bonds due September 2016 secured by the West Edmonton Mall (the “2016 Bonds”). The defeasance was accomplished by providing substitute security for the 2016 Bonds in the form of a portfolio of Government of Canada bonds. The government bonds were sufficient in amount and yield to fully amortize the 2016 Bonds. Defeasance transactions are not commonly undertaken in the Canadian capital markets and the defeasance of the 2016 Bonds required extensive multi-party negotiations and documentation, as well as the delivery by Fasken Martineau of various complex legal opinions. WEMPI used a portion of the net proceeds of its $900 million private placement offering that closed on February 13, 2014 which was comprised of an aggregate principal amount of $350 million 4.309% first mortgage 10-year interest only Series B1 bonds and an aggregate principal amount of $550 million 4.056% first mortgage 10-year amortizing Series B2 bonds (collectively, the “2024 Bonds”) to complete the defeasance of the 2016 Bonds. WEMPI owns the West Edmonton Mall located in Edmonton Alberta. West Edmonton Mall is the largest shopping centre in Canada and one of North America’s premier super-regional shopping centres. The Mall is the pre-eminent shopping destination in Western Canada and is one of Canada’s most prominent real estate developments. WEMPI was advised by a team of Fasken Martineau lawyers led by Jon Levin with Bruce Blain, Bill Bies, Aubrey Kauffman, Stuart Brotman, Alex Nikolic and Laura Fetter.