Deutsche Annington paves the way for refinancing of the GRAND securitisation
· Agreed heads of terms for refinancing reached on a non-binding basis with Noteholders
and shareholders representing approximately 37% of Notes
· Equity support of €504 million to be provided by the shareholders, managed by TerraFirma
· Loan-to-value (“LTV”) to be reduced to below 60%
· Annual amortisation schedule to be over a five-year period with €1.24 billion to be repaidin the first year (expected weighted average life 2.4 years)
Bochum, 10 July 2012. Deutsche Annington Immobilien SE, Bochum (“DAIG”) has agreed heads of terms on a non-binding basis with an ad-hoc group of Noteholders of the GRAND securitisation regarding the proposed refinancing of the GRAND Notes via a scheme of arrangement. The ad-hoc group of Noteholders, advised by Rothschild and Freshfields Bruckhaus Deringer LLP, comprises BayernLB, ING Investment Management, JP Morgan, Landesbank Baden-Württemberg, PIMCO and Standard Life Investments, who represent approximately 32% across the GRAND Notes. The Notes held by the ad-hoc group, when aggregated with the Notes held by DAIG’s shareholders, represent approximately 37% of the Notes.
At issuance in 2006, the total amount of GRAND Notes was €5.8 billion, the balance of which is expected to be €3.8 billion immediately after the transaction. Key terms under the proposed refinancing include equity support of €504 million from the shareholders (managed by Terra Firma), which combined with an updated valuation delivers a day-one LTV of approximately 59.7%. The transaction will enable DAIG to execute a series of partial refinancings of the underlying portfolio to deliver an orderly return of capital to Noteholders over a five-year period. Furthermore, DAIG will have the ability under the transaction to apply for funding for modernisation projects and invest in asset enhancement.
Within the extended maturity, €1.24 billion is to be repaid within the first year (of which €240 million as an equity contribution by the shareholders), €700 million in the second year, €650 million in each of the third and fourth years, and the remaining amount in the fifth year. DAIG expects this to lead to a weighted average life of 2.4 years. To reflect the extended maturity, the margin on the GRAND Notes is to be increased from 48 basis points to 165 basis points.
For full details of the commercial terms of the proposed refinancing, and key financial information on the GRAND securitisation, please refer to the DAIG website at www.deutsche-annington.com
In order to discuss the terms of the proposed refinancing, DAIG, its advisers and the advisers to the ad-hoc group will be engaging with other Noteholders and other GRAND stakeholders in the coming weeks, with a view to implementing the transaction later this year.
Wijnand Donkers, CEO of DAIG, commented: “A refinancing on these heads of terms would be positive for the Noteholders and our customers. It will enable the group to build upon its successful track record. I am therefore confident that the transaction will be successfully achieved on schedule.”
DAIG is advised by The Blackstone Group International Partners LLP and Allen & Overy LLP.
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