Blackstone Obtains a c. €2bn Mega-Loan for Testa

19 December 2018 – Expansión

The Socimi Testa held an extraordinary General Shareholders’ Meeting on Tuesday, where it reduced the number of members of its Board of Directors from 11 to 5. The new governing body includes three people proceeding from the new majority shareholder, the investor group Blackstone.

Testa Residencial is going to sign a mega-loan amounting to €1.943 billion, which it had already agreed in principle after the US fund Blackstone takes control of the rental home Socimi with the purchase of 80.6% of its share capital within the next few days.

The loan, equivalent to the amount that the purchase of the firm has cost the fund (around €1.52 billion) along with the debt held by the Socimi, has been agreed with Bank of America Merrill Lynch, Société Générale and Santander itself, Blackstone’s partner in Testa with 18% of its share capital.

This bank financing was agreed during the first meeting of Testa’s new Board of Directors following the restructuring of the management body conducted hours before, at the General Shareholders’ Meeting, when entry was granted to Blackstone.

By virtue of this restructuring, Testa’s Board has been reduced to five members, from the previous number of eleven. The fund has appointed three representatives to the Board, one of which, Diego San José, will also be the President of the Socimi, a role held until now by Ignacio Moreno.

The other two chairs at the table will continue to be occupied by the current CEO, Wolfgang Beck, and the director Miguel Oñate. In this way, the Board seeks to ensure continuity in the management of the real estate firm and to continue benefitting from Oñate’s experience and knowledge.

New strategy

Despite this continuity in management, at the first meeting of Testa’s Board, with Blackstone in the driving seat, a resolution was taken to approve a new strategy for the company, which had been planning to invest €550 million in the purchase of new rental homes to add to its existing portfolio of 10,700 flats.

The new strategy involves “analysing the eventual purchase of new homes depending on the circumstances at play in each case”. Moreover, Blackstone has raised Testa’s current leverage limit, situated at 35% of its asset value, and has reduced the dividend payment to the “legal minimum”.

In terms of the super-loan, it is being guaranteed by the assets of the Socimi itself, worth €2.3 billion in May when it was considering making its debut on the main stock market, and which will be signed with a two-year term, with the possibility of three annual extensions.

Dividend

Before changing the dividend policy, the Board also agreed to distribute a payment to the shareholders leaving the Socimi as well as to the new shareholders.

Specifically, it is going to pay €7.612 per share to the shareholders that leave the company after selling their stakes to Blackstone, in other words, to BBVA, Acciona and Merlin and to Santander for the proportion of shares that it has also sold.

Moreover, Testa will pay €0.035 per share to those players that will be its shareholders once the sale and purchase agreement has been signed within the next few days, in other words, to Blackstone and Santander, as well as to a group of minority shareholders who own 0.5%.

With the acquisition of this Socimi, Blackstone is strengthening its position as the largest owner of rental homes in Spain, with around 24,000 homes through its various firms and Socimis. Moreover, it is consolidating its position as one of the largest real estate owners in the country, with an asset portfolio worth more than €20 billion.

Original story: Expansión

Translation: Carmel Drake

Bain Appoints Juan María Nin as New President of Habitat

26 June 2018 – Eje Prime

Habitat is continuing to compose its governing body. The real estate company, which has been owned by Bain Capital since last year, has hired Juan María Nin (pictured below) as the new President of the company. The director is already a member of the Boards of Directors of Azora, Société Générale and Azvi.

Nin is joining the Catalan property developer at a time when the management team is being rebuilt by the US fund, which recently hired José Carlos Saz, formerly of Neinor Homes, as its new CEO.

The executive, who holds a degree in Law and Economics from the University of Deusto and a Masters in Law and Political Science from the London School of Economics, has enjoyed an outstanding career in the Spanish business world. Nin has held positions of responsibility at several banks including Santander, Sabadell and CaixaBank (…).

Habitat, which was acquired by Bain in December last year for €220 million, currently has a portfolio of projects underway in Spain, with more than 1,000 new homes being marketed in Madrid, Barcelona, Málaga, Sevilla, Córdoba, Valencia and Las Palmas de Gran Canarias. Of those, the real estate company has 700 homes under construction and expects to hand over more than 550 homes in the next twelve months.

Original story: Eje Prime

Translation: Carmel Drake

Record Financing Deal: Testa Raises €0.8bn From 16 Banks

15 December 2017 – El Confidencial

Testa has managed to close new financing amounting to €0.8 billion and, in a move that has made the deal remarkable, has not had to use any of its buildings as collateral.

As El Confidencial revealed, the entity in which Santander, BBVA, Merlin and Acciona hold stakes, was negotiating to refinance all of its debt so as to be well positioned to make its debut on the stock market and to have a sizeable sum to make new purchases.

In the end, according to financial sources, the Socimi has obtained the backing of 16 financial entities for the largest unsecured loan ever granted to a company in this sector in Spain. The new loan will be structured in three tranches, whose maturity dates will range between two and five years.

The first, amounting to €0.35 billion, is a bullet loan, which will be repaid in its entirety upon maturity, in December 2022; the second, for the same amount, is a 2-year bridge loan, which the company plans to refinance with a bond; and the third, a line of credit amounting to €0.1 billion has a mortgage guarantee over five years.

The entities that have participated in this financing are Banco Sabadell, Santander, Barclays, BNP Paribas, Caixabank, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Mediobanca, Natixis and Société Générale.

Following this agreement, Testa’s leverage ratio has increased from 15% to just under 35% and all of its debt is now corporate.

The Socimi is working with a view to making its debut on the main stock market in the spring. It will make that move with a portfolio comprising 9,219 homes dedicated exclusively to rent, spread over 111 buildings and worth almost €2.2 billion.

Nevertheless, thanks to the signing of this new financing, the Socimi now has fresh money to take on new acquisitions before its stock market debut, in line with the purchase that it announced in September of 135 homes from BuildingCenter, the real estate subsidiary of CaixaBank.

65% of Testa’s portfolio is located in Madrid, San Sebastían accounts for 7%, Barcelona 5%, Valencia 4%, Mallorca 3% and other locations the remaining 15%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Procisa Group Undergoes A Corporate & Financial Makeover

30 December 2016 – Expansión

Procisa, the group owned by the Cereceda family, which in turn owns La Finca, the business and luxury residential complex, in Pozuelo de Alarcón (Madrid) has embarked upon a profound corporate and financial restructuring process involving: a capital injection amounting to €395 million; the entry of the US fund Värde; and the strengthening of its corporate governance.

In terms of the corporate changes, from now on, the company will be organised around the Grupo La Finca holding company, which will in turn own three separate companies: La Finca Global Assets, dedicated to the real estate business and to the operation of the high-end office market; La Finca Casablanca, which will construct the largest luxury residential development containing more than 500 homes; and La Finca Real Estate, upon which the group’s future development will hinge.

Under the framework of this operation, the US fund Värde, owner of Dospuntos (the former real estate division of Sanjose) and owner of a stake in Aliseda, Banco Popular’s real estate asset manager, has acquired 39% of La Finca Global Assets. The US private equity firm, which manages more than $40,000 million in assets around the world, has been one of the most active investors in Spain since the outbreak of the crisis.

Portfolio

By virtue of the agreement signed yesterday, Värde, which must have paid around €130 million for its stake, will become a shareholder of the current office buildings in the portfolio and of the new projects in this area of the business. In addition to the La Finca business park, La Finca Global Assets’s properties include a property located on Calle Marcelo Spínola – a business centre comprising seven seven-storey buildings – and another property on Calle Martínez Villergas, comprising three seven-storey buildings.

Meanwhile, the La Finca business park, covering 220,000 m2 of premium rental space, comprises 20 buildings, 16 of which are used as offices plus the remaining four, located in the centre of the complex, which are used to provide the necessary services to the users of these offices. The complex’s current tenants include technological companies such as Orange and Microsoft.

In terms of the injection of funds, the company has signed a financing agreement with a syndicate led by Société Générale, CaixaBank and Santander amounting to €395 million, which it will use to pay off existing debt and tackle new projects. According to the latest available balance sheet, Procisa’s debt amounts to €525 million.

Specifically, the subsidiary La Finca Casablanca is planning to construct a development containing 515 luxury and exclusive homes, a shopping and leisure centre, as well as sports facilities and a golf course, in the south of Pozuelo de Alarcón.

New directors

Meanwhile, the group owned by the Cereceda family has strengthened its corporate governance by hiring some new directors. Susana García-Cereceda, the current Chairman of Procisa and one of the heiresses of the family empire created by the businessman Luis García Cereceda, who died in 2010, will lead the holding company and each of its subsidiaries, as the CEO.

In addition, Grupo La Finca will hire Jorge Morán as the Vice President of the holding company. (…). Moreover, Värde will join the Board of La Finca Global Assets with the appointment of three board members. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Santander Uses Uro Property’s First Dividend To Pay Off Debts

6 July 2015 – El Confidencial

Just four months after Uro Property’s IPO on the stock market, the landlord of 1,136 Santander branches, has approved its first dividends and the entity chaired by Ana Botín has used the funds to pay off some of the Socimi’s debts. And that is because Santander is not only the Socimi’s tenant, it is also the main shareholder of the company, previously known as Samos, which it inherited after the company’s bankruptcy due to its inability to pay off debts amounting to more than €2,000 million.

The foreclosure by the banks was orchestrated, primarily, through the company Zitoli, which currently holds 85% of the share capital, whilst Santander owns the remaining 15% as a result of its financing of the mezzanine debt. The two partners have agreed to use the shareholder remuneration that Uro Property has just authorised, amounting to €154.3 million, to repay its debts and continue the clean up of the Socimi.

This decision has been orchestrated through the issue of demand notes, securities that will be capitalised, taking advantage of a capital increase to pay off loans, which will take place this summer, just after 30 July, when the dividend payment will be made. From that moment on, Ziloti and Santander will devote 57% of the remuneration due to them, almost €88 million, to continue with the plan to clean up the Socimi.

The Cantabrian entity has the leading role in this process, since through its indirect shareholding via Ziloti, as well as the direct stake it holds from the inherited mezzanine loan, it holds 24% of the share capital. The next largest shareholder is CaixaBank, with a 15% stake, BNP Paribas with a 8.81% stake and Société Générale, with a 3.14% stake. Moreover, several hedge funds and entities such as Barclays and Bayerische Landesbankhold hold stakes of less than 1%; whilst the former shareholders, Sun Capital, now known as Atisha Holding, and Pearl Group, now Phoenix Life, hold 21.7% and 14.38% stakes, respectively.

These vehicles created the current Uro Property together with Drago Capital, the fund led by Oriol Pujol, which is currently being investigated by the Tax Authorities and from whom the Socimi has made every effort to distance itself. That former link is the main threat that hangs over the entity and could severely jeopardise the efforts being made by it, under the guidelines set out by its creditors to clean up its balance sheet.

In fact, the Socimi is one of 64 individuals and legal entities that have been denounced by the Tax Ministry for “the alleged commission of a crime involving money laundering and fraud”.

Whilst the Courts continue with their investigations, the banks are also progressing quickly with their roadmap designed to financially restructure the Socimi and find an exit for those creditors that do not want to continue to hold shares in the company. One of the main steps taken to that end, besides the listing of Uro Property on the stock exchange, was the sale of 381 branches to Axa for €308 million, which was approved in April, and the issue of bonds amounting to €1,300 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Uro Property To Issue Bonds To Secure €1,300M Funding

27 April 2015 – El Confidencial

The Socimi has launched its road show to issue 25-year debt that will allow it to repay all of its banking loans. The placement will be conducted in Holland through a special vehicle.

Uro Property has stepped on the accelerator to adjust its financial structure and position itself so as to compete head to head with the major Socimis in the market. Following its sale of 381 Banco Santander branches to AXA Real Estate (last month), the company chaired by Carlos Martínez Campos and led by Simon Blaxland, has launched a bond issue with a view to securing funds amounting to €1,300 million.

Through this placement, the Socimi wants to refinance all of its bank debt, which amounted to €1,424 million before the transaction with AXA, but which will be reduced by the corresponding proportion following the sale to the French group, since all of the funds (raised from the sale) will be used to repay its financial commitments.

This will be the first major bond transaction carried out by a Spanish Socimi. It forms part of the general move by these companies to return to the stock markets in search of liquidity and whereby take advantage of the window of opportunity that has opened up in stock markets around the world.

Holland is the market chosen by Uro to conduct its bond issue, which will be undertaken through the ad hoc creation of a special vehicle to issue the debt. Uro will verify investors’ appetite during the international road show, which the company has now launched; its objective is to reduce its current spread by 200-300 basis points and adjust the lifespan of the issuing vehicle to reflect the average life of Santander’s rental assets, i.e. around 25 years, although there will also be shorter terms.

The agreement with AXA has proved to be a lifeline for the Socimi, since it has resulted in the materialisation of the asset values assigned by CBRE. When Uro first listed on the MAB on 12 March, the real estate consultancy firm valued the company’s total portfolio at €2,000 million. Less than two months later, the French group, which owns one of the largest real estate investment vehicles in Europe, has paid 10% whereby giving credibility to Uro’s core assets.

Following the transaction with AXA, Uro now owns 755 Banco Santander branches, which have a combined surface area of more than 340,000 square metres and are valued at more than €1,700 million. Moreover, the branches that Uro has retained are the most desirable (prime) and are mainly located in Madrid and Barcelona, which explains why, despite having sold around one third of its assets (in terms of the number of branches), in terms of value, the sale only represents 15%.

Next steps

With all eyes on the closure of the (bond) issue in May, Uro is working on its road map, with a view to freeing up all of its bank loans and therefore, being able to address the company’s next objective, namely its listing on the stock exchange next year.

The Socimi’s major shareholder is Santander, which holds 24% of Uro’s share capital, whilst CaixaBank holds 14.98%, BNP Paribas owns 8.81% and Societe Generale holds 3.14%. Moreover, several hedge funds and entities such as Barclays and Bayerische Landesbank hold smaller stakes, of less than 1%, whilst the company’s former shareholders, Sun Capital, which is now known as Atisha Holding, and the Pearl Group, now Phoenix Life, hold 21.7% and 14.38%, respectively.

All of these shareholders have committed to continue to hold the Socimi’s share capital, for the next 12 months at least, although it is possible that, if an agreement is made between the shareholders, this period, known as the lock-up, may decrease if the circumstances in the market dictate that a move to obtain liquidity should be launched before the planned schedule, to pave the way for the stock market listing.

Uro’s IPO on the MAB was carried out to comply with the rules established for Socimis, which requires them to become listed vehicles within a maximum period of two years. Although Santander’s landlord still had time before the end of that term, it decided to list in March precisely because it wanted to pave the way for its bond issue, since investors always look more favourably upon debt issued by listed vehicles.

Nevertheless, since that was not its natural market and since at the time, it regarded the step more as a requirement than a vocation, it limited its placement on the Alternative Investment Market to the minimum legal requirement of €2 million. In contrast, once it has finished adjusting its financial structure and is able to begin actively working on its stock exchange listing, the company will have the opportunity to raise capital, which it will use to finance purchases, like other Socimis have done, given that all of the funds raised from its current bond issue will be used to repay its debt.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Santander’s Landlord Finalises The Sale Of 400 Branches

5 March 2015 – El Confidencial

Uro Property, the name given to the company formerly known as Samos, will begin trading on the MAB (‘Mercado Alternativo Bursátil’ or Alternative Investment Market) with the minimum legal amount, given that its ultimate aim is to move onto the main stock market.

Another one of the Socimi giants is counting down the hours until its goes public. Uro Property, the name give to the company formerly known as Samos, and the company through which several investment funds advised by Oleguer Pujol purchased a one third stake in Santander’s branches, will list on the MAB within the next few days and will continue to put the pieces in place to fulfil its aim of listing on the main stock market, with a healthier financial structure.

With this challenge in mind, the company chaired by Carlos Martínez Campos and led by Simon Blaxland is finalising the sale of 400 of the 1,316 branches that it owns, a transaction that it is already negotiating with an institutional investor and that will allow it to repay some of its €1,424 million loans ahead of time. This debt was already financed last year, when Samos’s creditor entities, led by Santander and CaixaBank, took control of the company, by capitalising €424 million of mezzanine debt and creating Uro.

This transaction turned Santander into the main shareholder of the Socimi, with a 24% stake, whilst CaixaBank took ownership of 14.89%; BNP Paribas holds a 8.81% stake and Société Générale holds 3.14%. In addition, several hedge funds and other entities, including Barclays and Bayerische Landesbank were left with stakes of less than 1%; whilst the former shareholders, Sun Capital, now known as Atisha Holding and the Pearl Group, now Phoenix Life, hold 21.7% and 14.38%, respectively.

All of the shareholders have committed to retaining their stakes for a minimum period of 12 months, during which time Uro Property is confident that it will close a new financing deal that will allow it to reduce its spread from its current level of 300 basis points to closer to 200 basis points.

In fact, the listing on MAB is seen as another step in this process, given that by law, all of the Socimis are obliged to go public within a period of two years. Although Uro Property’s deadline in this sense does not expire until after 2015, it has chosen to go public as soon as possible precisely because it believes that its status as a listed company will facilitate its refinancing.

This explains why Santander’s landlord is going to limit its initial placement to the minimum established by law: two million euros, a paltry figure, considering that its assets have been valued by CB Richard Ellis to amount to €2,000 million and given that forecasts suggest its market value amounts to around €500 million.

An independent audit to separate the company from Pujol

Renta 4 has been hired as the liquidity provider, whilst EY has performed the valuation of the company ahead of the placement. Aware that all eyes are focused on it, given its historical ties with Oleguer Pujol, the company commissioned Deloitte to conduct an independent audit (the auditor of the Socimi’s accounts is PwC), which certified that the maximum investment made in the Socimi by the son of the former President of Cataluña amounted to €67,000.

The Socimi has signed a new lease agreement with Santander, which has committed to occupy the properties for a minimum period of 25 years, and it may extend that period by 14 more years for a third of the assets, which the bank, chaired by Ana Botín, has identified as more strategic for its business. In return, the company has been granted the right to review the portfolio each year, as well as the ability to exchange some branches for others, provided these exchanges do not represent more than 1% per year, under any circumstances.

Santander will pay Uro rent amounting to €125 million net, since the bank itself will bear all of the costs relating to the properties. This guaranteed income, together with the refinancing deal signed last year, allowed the Socimi to generate profits in 2014. Moreover, with the new financial structure that it is negotiating, which it is hoped will extend the current six year maturity period, the Socimi is confident that it will significantly improve its results; this is key for a vehicle such as this, whose main attraction is the fact that it is obliged to distribute the majority of its profits in the form of dividends.

Uro will be able to begin working on its plans to list on the main stock market and expand its portfolio of assets from 2016, in line with the steps being taken by its competitors, such as Merlin, which acquired BBVA’s offices.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Cajamar And Cetelem Join Forces To Supply Consumer Credit

24 February 2015 – Cinco Días

Cetelem and Banco de Crédito Cooperativo (BCC), the parent company of the Cajamar Cooperative Group (Grupo Cooperativo Cajamar), have reached an agreement to form a joint venture that will specialise in the commercialisation of consumer credit in Spain, according to a press release.

The company, which will be owned by Cetelem España and BCC, will be constituted as a financial credit institution and its (primary) objective will be the distribution of personal loans and revolving credit lines (with or without credit cards) through the Cajamar Coooperative Group’s network of 1,300 branches.

BCC will contribute 49% of the initial share capital and will appoint the Chairman of the company. Cetelem will finance the remaining 51% and will appoint the CEO. BCC has been advised in this transaction by Société Générale.

Both entities agree that their commercial partnership will contribute to the development of consuming financing in Spain, thanks to Cetelem’s experience and knowledge (it is one of the most important players in the sector) and the extensive network of Cajamar Cooperative Group’s rural savings banks.

Thierry Laborde, Chairman and CEO of BNP Paribas Personal Finance, states: “We welcome this agreement, which has been established with one of the most important financial institutions in Spain. The agreement supports our development strategy based on partnerships between players in the distribution, automobile and finance sectors, in the countries in which we have a presence”.

Luis Rodriguez González, Chairman of BCC-Grupo Cajamar, reiterates his interest in consumer credit, which is a strategic activity for the 20 entities that constitute the Cajamar Cooperative Group. “This agreement confirms our on-going commitment to customers, adapting to their needs and offering them competitive, high quality products, in this case, consumer financing”. For this reason, “we are delighted about our alliance with Cetelem, the market leader in consumer credit and a global leader, renowned for its capacity for innovation, technological development and financial services”.

Original story: Cinco Días

Translation: Carmel Drake

Santander To List 2% Of Its Socimi And Whereby Avoid CIT

6 February 2015 – El Confidencial

Desperate times call for desperate measures. That is the proverb that Banco Santander is going to apply to a problem that has arisen after it sold a network of 1,152 bank branches bearing the red flame to a group of investment funds in 2007. The entity, which had to take the branches back when the investment company that had taken ownership of them filed for bankruptcy, is going to float that company on the stock exchange as a Socimi, and whereby avoid paying Corporation Tax. Oleguer Pujol, amongst others, was involved with the original investment company.

The main objective of the transaction that Santander and the other creditors that seized control of Samos Servicios for the non-payment of a €2,000 million loan is to float the newly named Uro Properties on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB). In fact, none of the current shareholders, which includes Santander itself – the largest, with a stake of almost 25% – as well as Caixabank, which entered through the back door and BNP Paribas, all primary lenders, are planning to sell or reduce their stakes in the Socimi.

The transaction will involve listing the company with the placement of a maximum of 2% of its capital, the minimum requirement. With such a small amount of floating capital or free floating capital, Uro Properties is only allowed to list on the MAB, even though its total assets are worth €1,600 million. As such, it will become the largest real estate company on the Spanish stock market. None of the other Socimis that followed the same path in 2013, such as Hispania, Lar, Axia or Merlin Properties, are equal in size.

Since the shareholders are not going to sell their old shares or proceed to offer new ones, like the other Socimis mentioned above have done, the only apparent purpose for listing Uro Properties is to benefit from the tax regimes offered to these kinds of companies. According to Law 11/2009, dated 29 October 2009, these real estate companies pay Corporation Tax at a rate of 0%.

To maximise the tax savings even further, the shareholders of Uro Properties Holding SA have created a parent company in Luxembourg, under the name Ziloti Holding SARL. The shareholders have already asked the MAB for permission to list their shares, as soon as possible, specifically, before the end of February.

From success to failure

The background to Uro Properties dates back to 2007, when Emilio Botín invented a transaction, which other large multinationals later went onto to make fashionable in Spain: the sale of properties to investment funds to obtain sizeable gains in exchange for staying as tenants and paying rent. It is what is called sale and leaseback. The purchasers of Santander’s 1,152 branches were Pearl Insurance, Sun Capital and Drago Real Estate, which were advised by Oleguer Pujol, now accused of crimes against the Treasury, and Luis Iglesias, who was arrested after his home was search, but not charged, according to an official spokesman.

The three funds paid €2,040 million and Santander generated profits of €850 million. But the collapse in the valuation of the real estate assets themselves and the loss of the bank’s credit rating led to an adjustment in the appraisal value of the branches – which were guaranteeing the loan – of more than €400 million. This meant that the purchasers were no longer able to service the loans they had taken out to finance the purchase.

Following the bankruptcy of Samos Servicers, Santander, which had borne most of the financing risk by granting mezzanine debt, had to convert that loan into capital. This meant that it went from being a creditor of the company to a shareholder in the renamed Uro Properties. BNP Paribas, Caixabank, Société General, Royal Bank of Scotland, Barclays and a group of German and Austrian banks, including Bayerische and Raiffessen, did the same thing.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

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