Tag: syndicated loan

The Monje Family Puts Assignia Construction Group Up For Sale

9 December 2016 – Expansión

The Monje Tuñón family, the controlling shareholder of Assignia Infrastructuras, has launched a feasibility plan to refinance the construction company’s debt and resolve the collapse of the group that has, amongst other consequences, resulted in the delayed payment of the last three months salaries to the workforce of 1,600 employees and which may force the company to suspend its payments it it fails to reach an agreement over the next few weeks.

The owner, which has stepped up talks with its financial creditors, is considering several measures to comply with the banks’ demands and access new lines of financing. In addition to the sale of several smaller assets, the Monje family has put the construction company up for sale, after identifying interest from several investment funds and two Asian industrial groups. The aim is that, with the entry of a new shareholder through a capital increase, the company’s balance sheet would be strengthened and an agreement would be facilitated with the banks to refinance a €60 million debt, which matures in December this year. (…).

The construction company forms part of the group of medium-sized companies in the sector, it is geographically diverse (with operations in 14 countries) and has several valuable assets, especially those granted under concession agreements. Assignia recorded turnover of €250 million in 2015, up by 12% compared with the previous year, and an EBITDA of €18 million. Its result was negative (-€4 million) due to its significant financial expenses, which amount to €12 million per year.

The group’s production portfolio currently amounts to around €700 million, but some of that amount is doubtful, given that Assignia, like all of the other companies in the sector has fallen victim to non-payments by debtors. (…).

As such, the company is preparing to implement an ERE redundancy plan in Spain, which will affect around 150 people, equivalent to almost 10% of its workforce. (…).

In the meantime, negotiations with the banks continue. The aim is that the banks will facilitate new maturity periods and open new lines of credit to ensure the continued operation of the company. Assignia’s financial debt is distributed between 10 banks through a syndicated loan that had to be renegotiated in March this year. Santander is the agent bank and Bankia is the entity with the highest exposure (around €20 million). CaixaBank and Sabadell, amongst others, also participate in the syndicate.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Hotelbeds Borrows To Finance Its Own Purchase (By Cinven & CPPIB)

8 June 2016 – Expansión

Hotelbeds has had new owners for just over a month. At the end of April, the private equity firm Cinven and the Canadian fund CPPIB won the bid opened by TUI to sell the Spanish travel services supplier. They put a joint offer on the table, valuing the company at €1,165 million, which exceeded all of the other bids. Now, they are holding negotiations regarding how they will pay that price.

All indications suggest that the target company will end up paying a large portion of the bill itself, in a debt operation that is typical in private equity acquisitions. According to several financial sources, Hotelbeds is in conversations with seven banks to obtain financing, including a syndicated loan amounting to €490 million and a line of credit amounting to another €150 million.

BBVA, Morgan Stanley, HSBC, UniCredit, Deutsche Bank, Bank of Ireland and Mizuho are the entities participating in the syndicate, which is expected to be closed within the next few days and whose fruits will be used to pay for some of the acquisition.

Neither the purchaser nor the vendor has provided details about how much of the €1,165 million value assigned to Hotelbeds will be paid for in debt and how much will be paid for in cash, but some of the parties involved implied that the latter will account for more than half of the total price. Using that reference and the fact that Cinven and CPPIB are not purchasing 100% of the company, rather some of its shares will remain in the hands of the travel services supplier’s management team, then it seems likely that the €490 million syndicated loan will cover a significant part of the total financing.

Hotelbeds will pay at least 500 basis points (5.5%) above Euribor for the syndicated loan, which will have a seven year term, according to financial sources. That spread was the maximum established to begin negotiations, so it may decrease, depending on the banks’ appetite and the conditions offered by the company.

The same thing will happen with the €150 million line of credit. In that case, the term will be six years and the minimum spread will amount to 450 basis points, but the definitive conditions will not be agreed until the negotiations have been finalised. (…).

Hotelbeds’ financial results work in its favour with respect to its negotiations with the banks, according to financial sources. The supplier works with 75,000 hotels in 180 countries and recorded a turnover of €1,200 million in 2015 and an EBITDA of €117 million. In addition to hotel rooms, the company also manages transfers, trips and corporate events.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Deutsche Bank Lends €50M To RE Firm Aktua

18 April 2016 – Expansión

Deutsche Bank was involved in the largest direct lending transaction in Spain last year. Moreover, 2016 is only three and a half months old, but the same bank is already the lender in one of the largest operations of the year. And with the same borrower.

In 2015, the real estate services platform Aktua was the recipient of a €150 million injection, which Deutsche Bank granted to refinance its debt and allow it to pay a dividend to its owner, the fund Centerbridge. Within the next few days, the details will be finalised regarding the transfer of that platform to Lindorff.

Now, the German bank has increased its loan amount by €50 million. The aim is for Aktua to be able to finance the purchase of the management of Ibercaja’s real estate assets, which the company announced in February.

With these two operations, the financing that Deustche Bank has granted to Aktua, the former real estate subsidiary of Banesto, amounts to €200 million, which increases the volume of direct lending operations that the German bank has completed in Spain. “In the corporate segment alone, we have lent more than €500 million in two or three years”, explains Jesús Medina, Director of Structured Finance at Deutsche Bank.

That amount also includes the funds loaned to the chocolate company Natra at the end of 2015. The German financing entity entered into a syndicate of lenders after purchasing the firm’s debt from a Spanish bank in the secondary market, and as a first step, it participated in the restructuring that Natra needed to complete to survive. But the second step involved putting new money on the table to enable the chocolate company to do more than survive. And it did so in the form of a direct loan, together with another debt fund, amounting to around €20 million. “Our feeling is that there are operations in the market and that the structured financing segment is going to continue to grow, but we have to meet the needs of the moment and the windows of opportunity that arise”, added the executive.

Original story: Expansión (by I. Abril and D. Badía)

Translation: Carmel Drake

ING Grants €280M Loan To Tan To Finance Torre Espacio

26 February 2016 – Expansión

It was the major real estate transaction of 2015. The sale of Torre Espacio to the Philippine group Emperador, owned by Andrew Tan (pictured above), last November was the grand finale to a year that all of the experts agree was the year during which the real estate sector finally began its recovery.

But the financial arrangements for this great purchase remained to be seen. The price agreed was €558 million, a figure to which almost €200 million of debt linked to the company Torre Espacio Castellana must be added. The company owns the skyscraper and served as the vehicle through which the Asian businessman acquired the building.

ING Wholesale Banking has now granted a syndicated loan amounting to €280 million with a seven year term, which will be used exclusively to finance this operation. The loan perfectly represents how the financial sector has reopened its appetite for high quality real estate assets.

According to sources, the rest of the operation will be financed directly by the Philippine businessman, one of the wealthiest people in the world according to the Forbes list. It ranks him as the 330th richest person on the planet and the third richest in his country, thanks to his fortune, estimated to be worth $3,700 million (equivalent to around €3,300 million at the current exchange rate).

Torre Espacio is one of four skyscrapers that were constructed on land that formerly housed Real Madrid’s Ciudad Deportiva in the North of the Madrid. The building has a gross leasable area of 60,142 m2, spread over 56 floors and 1,173 parking spaces. It is regarded as one of the most important office buildings in Spain and its main tenant is the former owner, Grupo Villar Mir, which occupies more than half of the property.

ING, which has acted as the sole underwriter and agent bank, highlights that this loan is a clear example of “the bank’s commitment to real estate financing in Spain and its significant profile in the Asian markets”, according to a statement made by Íñigo Churruca, CEO of ING Wholesale Banking. The entity is currently working to share the risk with other banks, although it is expected to take on the majority of the financing itself.

The entity also closed a financing agreement with Merlin Properties in January this year, amounting to €67.9 million and with a five year term, to finance the purchase of a portfolio containing seven logistics assets.

In addition, last year, it granted a syndicated loan amounting to €125 million, with a seven year term, to Acciona Inmobiliaria, which the company allocated to Urbanizadora Coto, a subsidiary of the group owned by the Entrecanales family that owns seven residential buildings and two offices, as well as a 50% stake in the Arturo Soria shopping centre, in one of the best areas of Madrid, close to Parque del Conde Orgaz.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aliseda Refinances Bank Debt To Lower Costs

15 December 2015 – Expansión

Loan / Popular, Bankia, Santander and Sabadell are leading a five-year syndicated loan to the real estate management company, amounting to €450 million.

Cheaper debt and new money to manage its needs over the next few years without any hardship. Resources are cheap at the moment, banks are willing to lend and companies are taking advantage of the environment to line their pockets and face up to the recovery. Few companies are letting the opportunity pass them by and Aliseda is not one of them.

The real estate services company, owned 51% by Värde Partners and Kennedy Wilson and 49% by Banco Popular, has just closed a five-year financing agreement that reflects all of the benefits of the new lending era in Spain. Eight banks have put €450 million on the table, in a syndicated loan that has two objectives.

The first is to refinance the €350 million debt that Aliseda took on when Popular sold the management of its real estate assets to two funds specialising in the subject. That financing agreement was signed at the end of 2013 and the interest that the firm paid on it was in line with market rates at the time. It is true that it wasn’t the worst time to be raising funds (the lows of the crisis and the credit freeze had already passed), but nor was it the best time.

Since then, Aliseda has been trying to refinance its loan (…). The financing granted in 2013 did not mature until 2018, but the company has decided to repay it early and replace it with a new lower-cost product. The result is a loan, due to mature in 2020, for which it will pay an interest rate of 350 basis points above Euribor, according to market sources, which represents a decrease with respect to its previous rate, given that the final cost will amount to approx. 3.5%.

New money

The second objective for the company, which manages loans granted to real estate developers and construction companies, as well as the assets foreclosed by Popular (its total portfolio amounts to €30,000 million) was to raise new funding. And it has achieved it.

And Aliseda is exceeding its objectives for asset sales this year; it had accumulated €1,588 million of divestments by the end of the third quarter. The goal for 2015 is to reach €2,000 million, although the company expects to exceed that threshold.

But Aliseda does not want to continue only with the management and sale of Popular’s assets; rather it is looking for new business lines and projects for the future. As such, it has decided to promote its own homes. And for that, it needed this additional funding.

Eight banks have provided the money. Naturally, Popular has led the loan and is the entity providing the most funding, although Bankia, Santander and Banco Sabadell have each signed a tranche amounting to more than 10% of the syndicated balance. BBVA is providing a very similar stake, along with Bankinter, whilst ING and Crédit Agricole are taking on smaller exposures.

Six of these banks were involved in the original financing agreement in 2013; only CaixaBank has left the original group; meanwhile, Bankia and ING have taken their place as new lenders.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Deutsche Bank Injects €150M Into Aktua Ahead Of Its Sale

17 November 2015 – Expansión

Aktua is up for sale. Banesto’s former real estate arm was acquired by the US fund Centerbridge in 2012, at the height of the financial crisis.

Now, more than three years later, it is time to capitalise on that operation in an economic scenario that is very different from the one seen in 2012; but before completing the transfer, Centerbridge has been “adorning” Aktua so that the operation closes in the best possible way for the firm. In this way, it has undertaken a comprehensive reorganisation of the company’s financial structure.

To achieve this, Centerbridge has not resorted to traditional channels. It was not averse to that option and in fact, it was there that it took its first steps, but the offer of a direct loan then crossed its path. “Aktua received financing offers from several commercial banks, but then one entity offered it a different structure, which was interesting as it allowed more leverage”, says a financial source.

That entity was Deutsche Bank, but not the bank’s commercial banking division, rather its direct lending team. And that offer changed the plans for Aktua. Centerbridge accepted the offer and the result has been an injection of €150 million in funding, which has been used to refinance the company’s debt and also to enable the owner to recover some of the investment it made in 2012, and to pay a dividend, according to several market sources.

In this way, the money that Centerbridge receives from the sale of Aktua will not be the only return it generates from the operation.

Sharing the risk

The direct loan was structured in two tranches, one amounting to €100 million and the other amounting €50 million, both with a 7-year term, something that is not that easy to find amongst the traditional banks. The first loan was signed between Deutsche Bank and Aktua at the end of May, but that was just the beginning – since then, the financing structure has been evolving. With the money now in the coffers of the recipients, Deutsche Bank has gone one step further and has decided to retain title over the entire second loan tranche, but to syndicate out the first €100 million tranche and whereby share the risk with other entities. Santander, Sabadell and Bankinter all responded to the call and so now the financing is shared between those four entities.

All of them will receive 300 basis points above 3-month Euribor for the €100 million first loan tranche. The €50 million tranche that Deutsche continues to hold has different costs and conditions associated with it.

This operation represents the launch of Deutsche Bank’s direct lending business in Spain. And the debut has been conducted in style: the €150 million injection makes the loan to Aktua the first in the list of the largest transactions performed by the banks so far in 2015.

Meanwhile, Centerbridge is now handling the second phase of the operation, namely: the sale of Aktua. It has engaged the investment banks Barclays and Bank of America Merrill Lynch to coordinate the sale, alongside the law firm Linklaters. According to Reuters, Aktua is worth around €300 million and its sale has sparked interest amongst several international venture capital funds, including the British fund Permira.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Colonial Repays €1,040M Loan Early & In Full

8 June 2015 – Expansión

Colonial, the real estate company in which Villar Mir owns a stake, has repaid the syndicated loan that it held amounting to €1,040 million, ahead of time and in full. It used the funds raised from its €1,250 million bond issue, closed at the end of May, to finance the repayment.

Original story: Expansión

Translation: Carmel Drake

Colonial Completes First Ever Debt Issue By A RE Company

28 May 2015 – Expansión

Colonial placed €1,250 million, but demand exceeded €2,700 million. The real estate company, controlled by the Villar Mir group will use these funds to refinance a bank loan, whereby reducing its financing costs.

Colonial debuted on the bond market yesterday with great success. The real estate company controlled by the Villar Mir Group completed a debt issue amounting to €1,250 million in two tranches: one over four years amounting to €750 million and the other over eight years for €500 million. It paid 1.864% for the first issue and 2.728% for the second.

This is the first debt issue ever to be carried out by a Spanish real estate company and it comes in the middle of the election hangover, which has generated considerable volatility on the markets. The debt issue aroused significant interest (demand exceeded €2,700 million with 225 purchase orders in total), which clearly shows that the confidence of investors has returned to a sector that was hit hard by the crisis (the real estate sector) and above all, to this company in particular, which underwent a tough refinancing process last year.

Lower costs

In fact, Colonial will use the funds obtained to repay a syndicated loan that it signed last year amounting to €1,040 million, which carries a high interest rate, at 400 basis points above 3-month Euribor, and which represents 40.5% of its liabilities. Sources close to the company explained yesterday that this refinancing with result in an annual saving of almost 2%. “The real estate company will stop paying around €20 million per year in interest”, they added. Moreover, the same sources noted that the company, chaired by Juan José Brugera, will no longer be bound by the conditions imposed by the banks, given that “the debt market has granted this financing with no conditions attached”.

To ensure the success of the issue, the CEO, Pere Viñolas and the Corporate Development Director, Carmina Ganyet, launched a road show on 14 May with the banks that they had engaged for the transaction: Morgan Stanley acted as the global coordinator, with the support of Sabadell, BBVA, CaixaBank, Crédit Agricole, ING and JP Morgan. The executives were well received, since S&P had assigned the company a ‘BBB-‘ rating.

As well as the plan to repay the loan to reduce financing costs, Colonial may improve its balance sheet in advance of possible M&A activity in the short term. Sacyr has considered the option of integrating its subsidiary Testa with Colonial to create a large real estate group. Colonial has been authorised to issue more bonds, amounting to €750 million.

Operation “Fade”

In addition to the activity in the private sector, the Government also plunged itself into the quest yesterday with the issue of a ‘fund to cover the electrical hole’ (“fondo que cubre el agujero electric” or Fade). It placed €1,300 million in securities that mature in September 2019, with the help of Santander, BBVA, Barclays and Citi.

The Administration is continuing to refinance this debt, which the vehicle has issued since its creation in 2009, to cover the electrical deficit (which arises due to the mismatch between the revenue received by the companies, from electricity tariffs, and the costs of generating it) at much more favourable costs. For this issue, it has only paid 0.85%, the lowest rate since the vehicle was created.

Meanwhile, the Sociedad Concesionaria Autovía de la Plata, owned by Meridiam (50%), Cintra (25%) and Acciona (25%) launched its first bond issue without a public guarantee in Spain yesterday, for €184.5 million. It is paying 3.169% for these securities, which are being traded on the MARF.

Original story: Expansión (by D. Badía and M. Anglés)

Translation: Carmel Drake

Sankaty Finalises Purchase Of 40 Large Loans From Bankia

6 May 2015 – Expansión

During 2015, Bankia has become an important focus point for international funds. Along with the sale of properties amounting to €4,800 million, the nationalised entity has launched three other large sales processes to divest non-strategic assets: one contains hotel debt – Project Castle; another involves problem mortgages – Project Wind; and the third includes large loans to real estate companies – Project Commander. The last of these is likely to close first, since the US fund Sankaty, a subsidiary of Bain Capital, is now in exclusive negotiations to seal the purchase and may sign an agreement in the next few days.

If the agreement comes to fruition, the investor will acquire 170 loans granted to 39 companies linked to the property sector. Of those, 31 are property developers that have filed for bankruptcy or liquidation. The portfolio include several loans granted to companies such as the Catalan firm Promociones Habitat.

Most of the loans are syndicated and bilateral, secured by rural land and industrial warehouses. The nominal value of the portfolio amounts to €500 million. Sankaty already acquired one portfolio from Bankia last year, together with the hotel investment giant Starwood. They paid the bank €400 million for hotel and real estate loans.

Original story: Expansión

Translation: Carmel Drake

Reyal Urbis Appeals To Judge To Advance Its Payment Plan

27 March 2015 – Expansión

Negotiations / The real estate company, which has a debt of €4,000 million, has appealed against the judge’s request to change and clarify certain points of its proposed agreement.

The negotiations to enable Reyal Urbis to emerge from bankruptcy have taken an unexpected turn. The real estate company, chaired by its largest shareholder Rafael Santamaría, has decided to appeal against the request from the judge in charge of the bankruptcy process to modify various points of its proposed agreement.

The decision by the real estate company to postpone the changes requested by the judge has come as a surprise, given the very difficult situation it finds itself in. Reyal Urbis has debt amounting to €4,435 million, whilst its assets are valued at €1,345 million. Moreover, it has an equity deficit of more than €3,000 million.

In 2014, the company recorded a loss of more than €694 million. It has not made a profit for five years, due to the depreciation of its real estate assets and declining sales.

On 6 March 2015, the judge Franciso Javier Vaquer, head of the Commercial Court No. 6 in Madrid, asked the company to remedy deficiencies in the feasibility plan that it had presented a few days earlier. The proposal by Reyal Urbis included a discount of 90% for those creditors with mortgage guarantees from bilateral loans. In the case of creditors of syndicated loans, which included entities such as Santander, Sareb and Barclays, the real estate company proposes two options: one of them involves a discount of 90% and the payment of the balance using certain assets (Reyal reserved some of its portfolio, worth €260 million, for itself).

The second alternative is a discount of between 88% and 93% and a six year wait for the payment of the remainder, with a grace period of four years. In both cases, the discount to be applied “far exceeds the legal limits”, something which is not justified in the feasibility plan presented by Reyal Urbis, according to the judge.

Moreover, the judge also considers that in its business plan the real estate company does not explain how it is going to obtain the funds to pay the remainder of the debt.

These high discount rates would not apply to the Tax Authorities, another one of Reyal Urbis’s creditors, with a liability of €400 million, which the judge asks them to justify “if the bankrupt entity is willing to grant the AEAT (State Tax Administration Agency or Agencia Estatal de Administración Tributaria) unique, special or beneficial treatment that differs from that offered to other creditors of equal ranking (…), then Reyal should explain all of the details behind the unique, specific or preferential treatment or treat AEAT in the same way as it would treat creditors of similar loans with no option to refer to a subsequent agreement”.

The “Drag effect”

In its proposal, Reyal Urbis clings onto the bankruptcy reform law, approved last year, to obtain its exit from bankruptcy, even without the support of all of its creditors. “The company interprets that Article 121.4 of the Insolvency Act allows a vote in favour of the proposal by 75% of the creditors (by grouped liabilities) of the aforementioned syndicated loan to “drag” the remaining 25%”, they say at the company. This is something the judge rejects, since the waiver of the rights to receive (funds) should be made expressly.

The appeal raised against the judge’s request has surprised the financial creditors, which had expressed their willingness to accept significant discounts in exchange for holding onto the assets that were already provisionally awarded through the drawing of lots, and which featured as collateral in the refinancing agreements signed in previous years.

The main creditors believe that these changes requested are necessary, before they will consider submitting the possibility of accepting this plan or not to their respective boards of directors. If it fails to gain the support of the majority of the debt holders, Reyal Urbis will have to follow in the steps of its counterpart Martinsa Fadesa, which is in the middle of liquidation.

Nevertheless, the creditors have not completely given up on the process and believe that the appeal may afford Reyal extra time to present a proposal by consensus.

Original story: Expansión (by R. Ruiz and S. Arancibia)

Translation: Carmel Drake