Colonial Launches €800M Bond Issue To Finance Axiare Takeover

21 November 2017 – Eje Prime

Colonial is pushing ahead with its plans for Axiare. The Socimi has launched a bond issue amounting to €800 million, funds it plans to use to partially finance the takeover that it has formulated for Axiare, with the aim of creating an office rental giant, as explained by the group in a statement.

The operation has been structured in two tranches, one amounting to €500 million over eight years and the second amounting to €300 million over twelve years. The real estate company led by Pere Viñolas (pictured above)  opened the placement books first thing on Tuesday and expected to close them by the end of the day.

Colonial is returning to the capital markets with an issue that forms part of the financial structure designed to finance the takeover of Axiare, launched on Monday 13 November, with the aim of acquiring the remaining 71% stake that it does not yet control in that Socimi.

The operation, worth €1,462 million, is currently being backed by a bridge loan facilitated by JP Morgan. The real estate company plans to replace that loan with this bond issue and, subsequently, reduce those securities with a program to sell non-strategic assets amounting to €300 million and other resources, including a capital increase, amounting to €450 million.

Original story: Eje Prime

Translation: Carmel Drake

Merlin Rationalises Its Portfolio & Backs Logistics Sector

7 April 2017 – Expansión

Following two years of intensive investments, Merlin is now preparing to rationalise its portfolio and extract greater value from its assets. The Socimi led by Ismael Clemente (pictured above) has set itself the challenge of improving the occupancy rates of its offices and shopping centres, as well as strengthening its presence in the logistics sector.

In February, the company announced its plans to increase its stock by more than 500,000 m2. The company has also started to rotate its assets and, following the deconsolidation of the residential business, it closed the sale of its hotel portfolio to Foncière des Murs for €535 million at the end of December.

Another one of the firm’s objectives is to maintain a balanced level of debt. In this way, last October, it placed €800 million in 10-year bonds to cover a bridge loan to Metrovacesa.

Original story: Expansión 

Translation: Carmel Drake

Merlin Will Issue €500M In Bonds Before Year End

16 September 2016 – Cinco Días

The new Merlin Properties will issue €500 million in bonds before the end of the year, according to a statement made on Thursday by Ismael Clemente, the Chairman of the Socimi, following the general shareholders’ meeting, at which the integration of Metrovacesa was approved. The aim of this operation is to convert a bridge loan from the former real estate company, which expires in 2018, into longer-term bonds, and therefore reduce the cost of its liabilities.

Two companies will emerge from the integration approved by the shareholders: the Socimi Merlin, with €9,000 million in assets, which will focus on the real estate business; and another new company, called Testa Residencial, which will focus on the rental homes. The new Merlin will have Santander as its main shareholder, with a 21.93% stake. BBVA will hold 6% and Popular around 3%. Clemente said that it is unlikely that the banks will exit their shareholdings within two years, unless they so wish, and that there are clauses that put caps on the sale of share packages at different points in time.

Moreover, the chief executive of Merlin said that the banks may be in for a surprise because the Socimi is capable of generating high returns. “We are a dividend distributing machine”, he said.

New housing company

Regarding the smaller company, Testa Residencial, the rental home business, Clemente confirmed that work is being undertaken to convert it into a Socimi within the next two years, although it may be sold sooner if a suitable buyer can be found.

He also revealed that the banks will include their own residential assets in this joint venture over the next two years. In the case of Santander, it will transfer more than 4,000 homes and BBVA, another 1,500 homes, figures that are expected to double the size of the company.

Testa Residential currently owns 4,700 homes and has a gross asset value of €980 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake