GSW Immobilien, the German residential giant owned by Goldman Sachs and Cerberus, is looking to refinance its €900m debt load after pulling out of a stock market flotation earlier this year.
The firm has appointed debt specialists Cairn Capital to advise on the possibility of restructuring or refinancing the debt, which is split across two securitised debt vehicles.
Berlin-based GSW is one of Europe’s largest residential property companies, and owns more than 50,000 apartments in multi-family blocks, primarily in Berlin. The €900m of debt matures in August next year.
Sources close to the negotiations indicated that it wanted to open discussions with bondholders and potential lenders as early as possible because of the huge amounts of debt secured against similar residential assets that mature over the next few years.
A further €9.8bn of debt secured against multi-family housing matures before 2013, says rating agency Fitch. It is understood that GSW does not want to compete with other firms for the limited amount of debt available.
GSW could look to extend the maturity of the existing loans, or try to bring in a large consortium of lenders to refinance the loans in the senior debt market.
According to Fitch, the value of the properties secured against the loans has fallen, meaning that the loans could be in breach of covenant.
However, low interest rates and the high occupancy rate of the portfolio of properties means that GSW’s cash flow is very strong, which will aid the firm’s negotiations.
