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Merlin Refinances Debt With €940 Million Loan

31/12/2014 – Expansión

Merlin Properties, one of the new realtors that have been listed as a REIT, announced yesterday that its subsidiary Tree Real Estate Investments (with a portfolio of 880 bank branches and five buildings leased long-term to BBVA) has signed a 10-year loan for 940 million euros with a syndicate comprised of CaixaBank, Santander, BNP Paribas, Credit Agricole, Banco Popular and Société Générale, among others.

The loan is secured by the asset portfolio of the subsidiary itself. The company will allocate part of the funds to repay existing debt of 828 million that is to mature in 2017 and interest rates ranging from 2.5% and 7.75% on top of the Euribor.

Lower cost

The new loan comes as an addition to the funding for 70 million euros based on an asset portfolio located around Madrid’s A-1 highway, signed in October. The Merlin leverage ratio will stand at 39%, with gross financial liabilities of 1.01 billion euros. The average maturity of debt will be 9.1 years, with an average cost of Euribor plus 1.76%. Part of the existing hedges will be held until maturity of the debt, so the cost of financing will be approximately 4% until 2017, compared to more than 6% today. The cost will go even further down, below 3%, afterwards. Merlin will go on working on the financing of two other assets from its portfolio, worth over 150 million euros, as part of its borrowing strategy, with up to 50% leverage.

Original article: Expansión

Translation: Aura REE