German property giant IVG emerged from its year-long insolvency process this week after clinching a crucial refinancing with Deutsche Bank.
The investment manager chose the German bank to provide €1.5bn (£1.2bn) of debt in two facilities, which will pay off the last of its €3.2bn legacy debt pile.
The €805m bridge loan has a duration of 18 months with two six-month extension options. The rest of the debt is a €680m, five-year core facility.
They refinance a 2009 vintage syndicated loan, SynLoan II, which had a balance of €1bn in 2012, when it was extended to expire in the fourth quarter of 2014.
This legacy position was held by 12 German banks, and the balance had fallen to €760m at the end of October last year.
The debt also pays down a core facility that had a balance of €563.5m last October and was set to mature in December 2015.
Other bilateral facilities, including debt outstanding on the 15-strong Pegasus office portfolio, will also be repaid. The balance of this facility was €145m in October 2011, when it was extended for at least two years.
IVG opened talks with potential lenders to refinance its debt pile more than six months ago.
A number of investment banks, including Goldman Sachs, Morgan Stanley, Citi, JP Morgan and Bank of America Merrill Lynch, are understood to have looked at the deal before it went to the domestic lender.
Market sources have speculated that the five-year core facility would lend itself to a securitisation by Deutsche Bank, which this week launched a €250m Netherlands CMBS deal.
Since entering voluntary insolvency proceedings last August to give itself time to shore up its finances, IVG has concluded a €2.2bn debt-for-equity swap in February that handed ownership to creditors of a €1.4bn syndicated loan, SynLoan I, and a €400m convertible loan, with investors in a €400m hybrid bond given a nominal holding.
The executive who led IVG’s sweeping restructuring, Hans-Joachim Ziems, said it is now “ready for the capital markets”. The German courts declared IVG insolvency proceedings complete on 16 September.
All parties declined to comment on the refinancing.
bridget.o’connell@estatesgazette.com
