On October 17, 2006, West Edmonton Mall Property Inc. completed a $600 million first mortgage bond financing secured by the world's largest shopping and entertainment centre, West Edmonton Mall. The ten-year financing bears interest at 5.66 per cent, which recognizes both the financial strength of the Mall and the favourable credit rating of its debt. The financing was provided by Column Financial Canada, a wholly owned subsidiary of Credit Suisse.
In order for the first mortgage bond financing to proceed, it was first necessary for an original $335 million of financing secured by the Mall to be defeased. The defeasance was accomplished by providing substitute security for the Mall in the form of a portfolio of Government of Canada obligations. The government obligations were sufficient in amount and yield to fully amortize the original financing. The defeasance of the original first mortgage bond financing is the largest defeasance transaction in Canada to date.
Because the $335 million of financing had been securitized by way of a distribution and sale to the public of co-ownership interests, Midland Loan Services, Inc. acted as loan servicer and it co-ordinated all approvals and consents required from the holders of the co-ownership interests in connection with the defeasance.
West Edmonton Mall Property Inc. was represented by Fasken Martineau DuMoulin LLP, with a team that included Jon Levin, Bruce Blain, Bill Bies and Sarah Gingrich in Toronto and Alison Oxtoby in Vancouver; and by Field LLP in Edmonton acting as local counsel, with a team that included Don Neeland, Teresa Tomkinson and Melissa Timbres.
Column Financial Canada was represented by McCarthy Tétrault LLP, with a team that included William McCullough, Marc MacMullin, Steven Baum, Nigel Johnston, Tzen-Yi Goh, Susanna Wong, Susan Sloan and Paul Galbraith, in Toronto, and Michael Birch in Calgary. Midland Loan Services, Inc., the master servicer, and Montrose Mortgage Corporation, as sub-servicer, were represented by Robert Antenore at McMillan Binch Mendelsohn LLP in Toronto.