The parent companies of two of Britain's biggest pub groups are working on plans to launch two of the biggest ever pub-backed securitised bond issues that together will be worth more than £2bn.
Deutsche Bank and Nomura, owners of Laurel and Voyager respectively, are thought to be at various stages of preparation.
ThePublican.com reported in October last year that Laurel Pub Company would look to re-finance its debt through securitisation this spring.
Securitisation works by issuing bonds that pay investors a rate of interest - the same as a high street bank making interest on a personal loan or mortgage.
The bonds are secured against pub-generated cash that comes mainly from rent paid by licensees and tenants.
This method of re-financing is much cheaper than traditional bank borrowings and will effectively reduce the money the group pays on its debt.
Chief executive Ian Payne (pictured) told thePublican.com: "We will draft a prospectus and look to securitise in May."
The group has existing debts of £1.3bn. It is understood to have approached financial advisors to handle a securitisation and will look to raise up to £1.4bn.
Deutsche Bank owns Morgan Grenfell Private Equity (MGPE), which in turn owns Laurel.
It bought the estate from Whitbread last year for £1.63bn. Laurel has already recouped £262.5m through the sale of 439 pubs to Enterprise Inns.
MGPE was not seen as a long-term owner of pubs due to financial difficulties within the group. It is now thought those problems have been overcome.
Laurel is now considered a potential buyer of pubs and the fact that the company is addressing it's debt is a sign that it is here to stay.
Meanwhile, Nomura has reportedly appointed advisors to handle the securitisation of the Voyager Pub Company, the business it bought from Six Continents for £625m, 12 months ago.
This would delay any possible merger with Unique, Nomura's other pub business.
Guy Hands, one Britain's most celebrated financiers and founder of Nomura's Principal Finance Group (PFG), pioneered securitisation as a way of raising vast sums of money.
Mr Hands and his PFG team bankrolled £10bn in seven years, largely through securitisation.
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Laurel to address £1.3bn debt (18 October 2001)