Reuters – Terra Firma Injects Cash into Deutsche Annington

Deutsche Annington, Germany’s largest housing company, has agreed a restructuring of its finance vehicle which includes a 504 million euro ($620 million) equity injection from owner Terra Firma, the company announced on Tuesday. Deutsche Annington will refinance its German Residential Asset Note Distributor CMBS which originally issued 5.8 billion euros of notes in 2006. After Terra Firma’s equity injection, GRAND’s outstanding debt will be reduced to 3.8 billion euros which the company has committed to refinance over an extended five-year period after getting approval from an ad-hoc group of bondholders

(Reuters) – Deutsche Annington, Germany’s largest housing company, has agreed a restructuring of its finance vehicle which includes a 504 million euro ($620 million) equity injection from owner Terra Firma, the company announced on Tuesday.

 

Deutsche Annington will refinance its German Residential Asset Note Distributor (GRAND) CMBS which originally issued 5.8 billion euros of notes in 2006.

 

After Terra Firma’s equity injection, GRAND’s outstanding debt will be reduced to 3.8 billion euros which the company has committed to refinance over an extended five-year period after getting approval from an ad-hoc group of bondholders.

 

Deutsche Annington, advised by Blackstone, will repay 1 billion euros in the first year, 700 million in the second, 650 million in each of the third and fourth years and the balance in the fifth year.

 

Bondholders are receiving an interest margin increase in return for agreeing to the terms, from 48 basis points to 165 basis points.

 

The ad-hoc bondholders, advised by Rothschild, are BayernLB, ING Investment Management, JP Morgan, Landesbank Baden-Wuerttemberg, PIMCO and Standard Life Investments – representing 32 percent of the notes. Combined with the bonds held by Terra Firma, they represent 37 percent.

 

The proposed restructuring will be conducted via a so-called scheme of arrangement which is a court-approved agreement between a company and its lenders. A court hearing is scheduled for later this year when 75 percent of Deutsche Annington bondholders will be required to pass the proposed refinancing.

 

A refinancing is expected to pave the way for a potential IPO, which has been in discussions for many years. ($1 = 0.8130 euros) (By Claire Ruckin; Additional reporting by Isabell Witt; Editing by Dan Lalor and David Cowell)