Tag: maturity

Quabit Issues 4-Year Bonds Amounting to €20M

29 March 2019 – Valencia Plaza

The property developer Quabit Inmobiliaria has issued bonds amounting to €20 million through its wholly owned subsidiary Quabit Finance. The bonds have a maturity of 4 years and a coupon of 8.25%, which will be paid annually.

The success of the placement represents a great boost to the company’s strategy and confirms investors’ confidence in its management capacity. The funds raised will be used to undertake new investments, finance new projects and whereby continue with the firm’s growth and expansion plan.

Original story: Valencia Plaza

Translation/Summary: Carmel Drake

Sareb Parks €20bn Asset Megasale Due to High Costs

20 July 2018 – Voz Pópuli

Sareb has shelved its megaplan with Goldman Sachs to sell between €20 billion and €30 billion. The bad bank’s Board of Directors has decided that it is not the right time for an operation of that kind, due both to the high costs that it would incur, as well as due to the period of reorganisation that the servicer sector is undergoing, according to financial sources consulted by this newspaper.

The US investment bank, led in Spain by Olaf Díaz-Pintado, has been conducting a detailed study regarding how, when and to whom it could sell this portfolio. For this study – known as Project Alpha – Sareb has also relied on the consultancy firm CBRE and the audit firm EY.

The findings were presented at the Board meeting on Wednesday, and received a cool reaction. No approval was given either for the block sale of the €20-30 billion, or of any part of it.

Impact on capital

One of the key points in the report is the capital hole that the sale of these assets would have generated for a large fund, which typically require greater discounts than individual investors. Goldman proposed improving the price, by giving the buyer an asset management contract, which would allow it to sacrifice future expenses in exchange for not consuming the capital of the bad bank.

Following the detailed study, the Board of Directors chaired by Jaime Echegoyen has decided to park the operation for the time being and to focus on other alternatives. The first is going to be what to do with the management contract that it has with Haya Real Estate, which expires next year and whose assets are the ones that Goldman Sachs has been studying the sale of. The maturity of Haya’s contract is the prologue of the other three servicers to work with Sareb, namely: Altamira, Servihabitat and Solvia.

Faced with these types of contracts, which were classified by asset origin, Sareb wants to segment its sales by province from now on, to join forces with specialist real estate firms in each region.

Before being shelved, Sareb had already been assumed that Project Alpha would be archived due to the change of Government, according to El Confidencial, and the intention of the new Government to undertake an audit of the bad bank.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Grupo Ortiz Completes 5-Year Bond Issue Worth €50M

10 July 2018 – Eje Prime

Grupo Ortiz has finalised the placement of bonds worth €50 million with the aim of replacing a previous issue that is due to expire next year. Thanks to this operation, the company will reduce the cost of its debt and extend its maturity period.

The new bonds, subscribed by qualifying investors, are being launched over five years, in such a way that they will expire in 2023. The interest rate on the bonds is 5.25%. The new securities replace those issued for the same total amount in 2014, which are due to expire in 2019 and which generate a cost of the company of 7% per annum.

The new bonds, just like their predecessors, will be admitted for trading on the Alternative Fixed Income Market (MARF). Grupo Ortiz was the third company to launch debt securities on that market.

In 2017, Grupo Ortiz completed a portfolio of building work pending execution worth €6 billion, up by 45% compared to the previous year, boosted by the expansion of its international business, primarily in Latin America. More than two-thirds of the company’s business is generated overseas.

Original story: Eje Prime 

Translation: Carmel Drake

Realia Refinances the €120M Debt Owed by its Property Development Arm

22 June 2018 – Eje Prime

Realia has today refinanced the debt owed by its property development arm, amounting to €120 million. The liability was due to mature on 30 June 2018, according to a statement filed by the real estate company, in which FCC and Carlos Slim hold stakes, with Spain’s National Securities and Exchange Commission (CNMV).

The new financing is due to mature on 31 December 2020. Realia has also indicated that “(the new financing) has been subscribed under competitive market conditions”. At the end of 2017, the company had gross bank debt amounting to €763 million, down by 10% compared to a year earlier.

Realia ended the year 2017 with a net profit of €30.5 million, 73.7% less than in 2016. The decrease was caused by the extraordinary results registered in 2016 due to discounts associated with another debt refinancing.

Original story: Eje Prime 

Translation: Carmel Drake

The Profits Of Spain’s Top 5 Socimis Rise By 68%

16 November 2017 – Expansión

Spain’s principal Socimis are continuing to register record-breaking numbers and improve their balance sheets thanks to the on-going real estate boom and the appreciation of their assets. In this way, during the first nine months of the year, Merlin, Colonial, Hispania, Axiare and Lar España saw their combined net profits soar by 68% and the value of their property portfolios rise by 35%.

In total, the largest five Socimis that trade on the Spanish stock market earned €1,306 million during the nine months to September 2017. Their revenues during the same period amounted to €797 million, up by 30% compared to the first nine months of 2016. The reason why these companies earn more (profits) than they turnover (revenue) stems from the significant capital gains that they record from the appreciation of their real estate portfolios. In this way, for example, Merlin Properties and Hispania recorded €332.6 million and €204.82 million, respectively, for this concept, during the first 9 months of 2017.

These five real estate companies, which, with the exception of Colonial, debuted on the stock market just three years ago, currently own combined assets worth €24,295 million. Of that volume, two of the companies stand out due to their size: Merlin, which although it did not update its portfolio in the third quarter, is still the largest entity with an asset volume of €10,556 million; and Colonial, which owns properties worth €8,253 million.

Consolidation

The success of the Socimis, together with the good times that the real estate sector is enjoying, has led these companies to enter a new phase. In this way, after years of intense competition, the companies are starting to rotate their assets, by selling the properties that are not strategic as well as those that have reached a certain degree of maturity in their portfolios.

Such is the case of Merlin, which at the start of the year sold its hotel portfolio to Foncière de Murs Lar, for €535 million, and has deconsolidated its residential branch through Testa. Lar España has done something similar, given that in September it sold an office building to Colonial for €32.5 million, to focus on its current strategy of commercial assets.

Meanwhile, Hispania, which will focus its activity on hotels until its extinction, planned for 2020, is continuing with the unitary sale of homes and is also preparing the sale of its office portfolio, although it has had to postpone that operation until the first quarter of next year in light of the Catalan crisis.

These real estate companies are also backing investments that involve the revaluation of the assets they have acquired. Such is the case of, for example, Merlin, which after absorbing the real estate portfolio from Metrovacesa, is updating its portfolio, with an investment of €95 million to renovate six shopping centres. The Socimi in which Santander and BBVA hold stakes is also investing another €46 million in the construction of a new office tower (Torre Chamartín) in Madrid and in the renovation of Torre Glòries. Meanwhile, Lar España has managed to increase the value of its portfolio by more than €230 million with respect to the purchase price of its properties.

Moreover, the market is preparing for consolidation between the Socimis. The first move in this sense came last Monday with the launch of a takeover by Colonial for Axiare. The former announced the purchase of an additional 13.3% stake in Axiare on Monday and a takeover bid for the remaining 71%.

Stock market

Merlin, Hispania, Axiare and Lar raised almost €2,560 million in their respective debuts on the stock market and they have a combined market capitalisation of €9,060 million.

Including Colonial, whose General Shareholders’ Meeting approved the adoption of the special tax regime for Socimis in June, with retroactive effect to January, the stock market value of the large Socmis amounts to €12,038 million. In addition, Colonial’s bid for Axiare has raised its stock market value by €154 million in three days.

Original story: Expansión

Translation: Carmel Drake

Sabadell Places €1,000M In 10-Year Mortgage Bonds

20 April 2017 – Expansión

It has taken Sabadell just four months to debut on the debt market this year. Yesterday, it completed the placement of €1,000 million in mortgage bonds with a maturity of 10 years, to leave Popular as the only entity that, given the uncertainty surrounding its specific situation, has not resorted to the capital markets to raise finance or secure resources for its capital buffer.

For these bonds, Sabadell is offering a coupon of 1%, in other words, 33 basis points above the mid-swap rate, the reference rate for issuances of fixed income securities in euros. The mortgage bonds are the safest debt that an entity can issue, given that, in Spain, they are guaranteed by all of the mortgage loans of the issuing bank, which serve as collateral in the event of bankruptcy. There has never been a default of this kind in Spain.

To carry out the operation, Sabadell has received help from Barclays, Commerzbank, Crédit Agricole, Lloyds and Natixis, as well as from its own investment banking team. Demand for the bond issue amounted to €2,400 million, in other words, more than twice the amount awarded.

Santander Totta

Meanwhile, Santander Totta, the Portuguese subsidiary of Santander, launched an order yesterday to place 7- and 10-year mortgage bonds. According to sources in the market, the operation will close tomorrow and will serve to raise cheap financing. Besides Santander, the following entities are participating in that operation: Unicredit, Deutsche Bank and Société Générale.

Original story: Expansión (by A. Stumpf)

Translation: Carmel Drake

Realia Finalises €700M Syndicated Loan To Repay Debt

23 February 2017 – Expansión

Realia is finalising a syndicated loan amounting to around €700 million. And with just the finishing touches left to complete, all indications are that the company controlled by Carlos Slim will reach an agreement with its new creditors within the next few weeks, just in time to cancel the debt held by its subsidiary Patrimonio before it matures, on 27 April.

In addition to CaixaBank, which will lead the new loan syndicate, Santander and Bankia have approved the operation and are negotiating with other banks to include them in the agreement as well.

“Realia Patrimonio is currently negotiating its refinancing with several entities”, explained the company in a document submitted to the CNMV, in which it warned that if, by the aforementioned maturity date, the entity has not reached an agreement with its creditors or it has not been possible to secure new financing sources, then “it will have a liquidity problem”.

In April 2007, Realia Patrimonio undertook a debt restructuring through the subscription of a syndicated loan with Caja Madrid and Banesto, which subsequently transferred part of its exposure to another 14 entities for an initial maximum amount of €1,087 million, which it has been repaying ever since. Currently, its debt balance amounts to around €680 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Colonial Completes €600M 8-Year Bond Issue

24 October 2016 – Expansión

The real estate company Colonial has completed a bond issue amounting to €600 million with a maturity of eight years and an annual coupon of 1.45%, according to a statement made by the group to the CNMV.

The company will allocate some of the amount raised from this operation to the repayment of bonds issued in May amounting to €750 million; they have a maturity of four years and an annual coupon of 1.863%.

The subscription and payment of the latest issue will likely take place on 28 October. For this operation, Colonial has engaged Deutsche Bank – London Branch, BNP Paribas, Crédit Agricole, JPMorgan, Mediobanca, Merrill Lynch and Natixis.

The company’s return to the debt market comes just days after it announced the acquisition of a stake in Axiare. Specifically, Colonial purchased 15.1% of the Socimi for €135.6 million.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake

Quabit’s Losses Decreased By 45% In H1 2016

16 August 2016 – Expansión

Quabit has closed the first half of the year with a net loss of €3.29 million, representing a reduction of 45% compared with H1 2015. The firm chaired by Félix Abándades has multiplied its revenues five-fold, to €21.1 million, and has reduced its net debt by 4% to €216.8 million as at the end of June.

The real estate group recorded gross operating losses of €3.45 million, which represents a reduction of 41% with respect to the negative balance recorded during the same period in 2015.

Quabit – which is in the middle of a five year business plan – underlined the fact that both the generation of revenues as well as of profits will “happen gradually” as its residential projects progress. They have a maturity period of between 24 to 36 months, which means that, during the first two years of the plan, the company’s EBITDA will remain negative.

The group added that, during this period, it will be possible to obtain profits through discounts on its debt and the gradual activation of tax credits. Quabit has agreed payment conditions on its debt that will allow it to register profits from discounts on its debt amounting to €55 million. It also has unregistered tax credits on its balance sheet amounting to €183 million.

On Friday, the company’s share price fell by 0.31% on the stock exchange to €1.74.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Realia Launches €87M Capital Increase

11 November 2015 – Cinco Días

Realia has approved the launch of a capital increase amounting to €87 million, which the real estate company’s majority shareholder, Carlos Slim, has promised to participate in, according to the company.

By virtue of the operation, the real estate company will issue 150 million new shares at a price of €0.58 per share, the same price that Slim paid in the takeover (OPA) through which he took control of the company.

With this operation, Realia is seeking to strengthen its financial structure ahead of the company’s debt restructuring program. In total, Realia’s debt amounts to €1,067 million, of which half is due to mature within the next few years.

Original story: Cinco Días

Translation: Carmel Drake