Metrovacesa Refinances All Of Its Debt Ahead Of Its IPO

18 May 2016 – El Confidencial

Metrovacesa, the real estate company controlled by Santander, BBVA and Banco Popular, has managed to definitively emerge from the abyss into which it fell in 2009, when the then owner, the Sanahuja family, saw how the creditor banks enforced their guarantees for the €4,000 million that they were owed.

The company now chaired by Rodrigo Echenique, one of the strong men from the entity led by Ana Botín, has managed to reach an agreement with the creditor banks to refinance all of Metrovacesa’s financial commitments through bond issues and debt restructuring.

This week, the company will release €700 million in 6-year bonds onto the market with interest of 240 basis points. Once that test has been passed, Metrovacesa will restructure its remaining €1,100 million in financial commitments, an operation that may include another bond issue, now that it has received the ok from its creditor banks, with a similar term and margin.

With all of this homework done, the real estate company is completing an ambitious clean-up plan, which has led it to undertake: two capital increases in less than a year, for a total amount of €1,650 million; the carve out of its entire property development business into the recently created MVC Suelo; the sale of its logistics business; and a significant reorganisation of its shareholders, with Santander’s purchase of Bankia and Sabadell’s stakes, which allowed the Cantabrian entity to take over 70.27% of the group’s shares. (…).

Now, according to sources familiar with the company’s plans, once all of its debt has been restructured, Metrovacesa plans to return to the stock market, probably as a Socimi. Although no date has yet been set, they are working with a two year timeframe (…).

Proof of the good work done so far came in the form of the credit rating that the company obtained from the ratings agency S&P, which granted it a preliminary rating of BBB- and a stable long-term outlook, and Moody’s, which assigned it a Baa3 rating, also with a stable outlook. (…).

The resurgence of a giant

Following the carve out of its property development business, Metrovacesa has a portfolio of assets worth €4,300 million, primarily comprising office buildings for rent, although it also owns a sizeable package of shopping centres, a dozen hotels and more than 3,000 homes with a gross leasable area of more than 1.5 million sqm.

Those figures make it one of the giants of the reborn real estate business, alongside the Socimi Merlin, which led the return of property companies to the Ibex 35 following its acquisition of Testa, and Colonial, a mirror into which the company chaired by Echenique is looking to recover its past splendour and the only one of the large companies in the sector that has not converted itself into a Socimi, because the tax credits that it has eclipse the tax advantages of the new company structure.

Metrovacesa was excluded from the stock market in May 2013, after 72 years as a listed company and after seeing the creditor entities take control. Currently, Santander owns a 70.27% stake, BBVA a 20.52% stake and Popular a 9.14% stake. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

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