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Cairn, CPPIB to buy bond secured by Romanian real estate

Cairn Capital and Canada Pension Plan Investment Board (CPPIB) have agreed to buy a €180 million ($262 million) bond secured on properties owned by Globalworth Real Estate Investments Ltd, a European real estate investment firm. CPPIB’s credit investments arm will acquire €150 million of the bond, with Cairn accounting for the rest. The bond is secured by prime real estate assets in Bucharest, Romania. London-based Cairn is a credit asset management, advisory and securities restructuring firm.


Cairn Capital and Canada Pension Plan Investment Board enter into agreement with Globalworth Real Estate Investments Ltd.

London, U.K., and Toronto, Canada (May 31, 2016): Cairn Capital, through its newly formed European Commercial Mortgage Fund (Cairn), and Canada Pension Plan Investment Board (CPPIB) through its wholly-owned subsidiary, CPPIB Credit Investments Inc. (CPPIB Credit), today announced they have signed a commitment to purchase a €180 million bond secured on properties owned by Globalworth Real Estate Investments Ltd. (AIM: GW) (Globalworth). CPPIB Credit will acquire €150 million of the bond, with funds managed by Cairn Capital purchasing the remaining €30 million. The bond is secured by prime real estate assets in Bucharest, Romania and is a single tranche transaction, listed on the Channel Islands stock exchange.

Cairn Capital privately arranged the bond on behalf of Globalworth. This transaction was agreed directly between the investors and Globalworth, enabling the creation of a customized capital market financing that satisfied each party’s requirements.

David Henriques, a Director of Cairn Capital said: “We are grateful for the trust Globalworth placed in Cairn Capital in mandating us to structure and arrange this important transaction, we look forward to continuing our close relationship with both CPPIB and Globalworth.”

Commenting on the deal Martin Healey, Managing Director and Head of Private Real Estate Debt at CPPIB Credit said: “This investment aligns well with our strategy of providing customized, large-scale funding solutions to borrowers with excellent underlying real estate assets and strong management teams. We look forward to building our relationships with Cairn Capital and with Globalworth.”

Ioannis Papalekas, Chief Executive Officer of Globalworth said: “Securing the support of international real estate investors of the calibre of CPPIB is a huge endorsement of Globalworth and our position in the Romanian market. We have built a portfolio of properties that we are proud of and will continue to be an active investor where we see value, thus cementing our position as one of the leading real estate investors in the region. With a local presence and established expertise, Globalworth is very well positioned to take advantage of attractive investment opportunities as they arise.”

About Cairn Capital

Cairn Capital is a London-based full-service credit asset management, advisory and securities restructuring firm established in 2004. Cairn Capital has in-depth exposure to credit markets due to its diverse business lines, comprehensive bottom up research, technical understanding and bespoke trading and analytical tools. Cairn Capital has a particular, but not exclusive, focus on the European credit markets. Cairn Capital has $2.1bn of assets under discretionary management and $9.7bn under long term advice (as at 31 January 2016).

About CPPIB Credit Investments Inc.

CPPIB Credit Investment Inc., a wholly-owned subsidiary of CPPIB, is comprised of CPPIB’s Principal Credit Investments (PCI) group and its Private Real Estate Debt group. CPPIB Credit’s Private Real Estate Debt group invests directly in diverse types of private real estate debt including first-mortgages, b-notes, mezzanine loans, preferred equity and single-asset commercial mortgage-backed securities (CMBS). With nine debt professionals based in Toronto and London, the group targets positions from C$50 million to over C$500 million that are backed by high-quality real estate and feature a tenor, leverage profile or an asset specific consideration that requires a customized solution. Since its formation in 2010, the group has invested or committed more than C$7 billion into commercial real estate credit transactions.

About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 19 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31,2016, the CPP Fund totalled C$278.9 billion.

About Globalworth

Globalworth Real Estate Investments Limited is a real estate investment company founded by real estate investor and developer Ioannis Papalekas, currently focused on taking advantage of investment opportunities in Romania. The Company’s shares were admitted to trading on AIM in July 2013.

Photo courtesy of ESN International