-
Signing of an agreement with investors representing approximately 56% of the unsecured bond with a volume exceeding 250 million EUR (the "2020/2023 Bond") , and the imminent conclusion of an agreement with the sole investor in the unsecured bond with a volume of over EUR 100 million (the “2021/2026 Bond”; together with the 2020/2023 Bond, the “Bonds”) with a view to supporting a comprehensive refinancing
-
The refinancing is a strong and important sign of confidence and support from bond investors and provides valuable financial stability for the future
-
The refinancing is expected to be completed swiftly in the coming weeks
Berlin, December 16, 2022 – ACCENTRO Real EstateAG (“ACCENTRO”), a residential real estate investor and Germany’s leading residential privatization company, is pleased to announce that it has signed a binding agreement (the “2020/2023 Bond Lock-Up Agreement”) with a group of bond investors who collectively hold approximately 56% of the face value of the 2020/2023 Bond (the “2020/2023 Ad Hoc Committee”), and will shortly sign a separate amendment and consent agreement (the “2021/2026 Bond Amendment Agreement”) with the investor in the 2021/2026 Bond (the “2021/2026 Bond Investor”). Pursuant to these agreements, the parties agree to support a comprehensive refinancing transaction (the “Refinancing”) that will extend the maturity of the bonds by three years each.
The proposed term extension is a strong and important sign of confidence and support from the bond investors and provides the company with the flexibility and stability to continue its success story. The refinancing will enable ACCENTRO to concentrate on further optimizing its business activities and to focus on attractive growth areas in the future, while remaining a reliable and attractive partner for its key financial stakeholders and business partners. Lars Schriewer, CEO of ACCENTRO, said: “ACCENTRO has an outstanding track record and a strong market position in the German real estate market. Although we cannot escape the current challenging market environment, we look to the future with great confidence. We are very pleased with the strong support from our bond investors, which encourages us on our path and will help us continue to operate successfully in the best interests of all stakeholders.”
ACCENTRO was advised by Perella Weinberg Partners as financial advisor and Latham & Watkins LLP as legal counsel. The 2020/2023 Bond Ad Hoc Committee was advised by Houlihan Lokey as financial advisor and Milbank LLP as legal counsel.
2020/2023 Bond Lock-Up Agreement and 2021/2026 Bond Amendment Agreement
Under the terms of the 2020/2023 Bond Lock-Up Agreement and subject to certain conditions, the 2020/2023 Bond Ad Hoc Committee and ACCENTRO have agreed to carry out the refinancing in accordance with the German Bond Act, while the refinancing of the 2021/2026 Bond will take place simultaneously through the 2021/2026 Bond Amendment Agreement.
The key elements of the refinancing with respect to the 2020/2023 Bond include, among others:
-
A repayment of EUR 25 million upon the refinancing taking effect;
-
an increase in the cash interest rate by 2 percentage points, from 3.625% to 5.625%;
-
Extension of the maturity date from the original February 13, 2023, to February 13, 2026;
-
contractually guaranteed minimum cumulative repayments (including a repayment of EUR 25 million upon the effective date of the refinancing): EUR 65 million by December 2023, EUR 130 million by December 2024, and EUR 150 million by February 2025;
-
Mandatory special repayments from net proceeds from the sale of investment property and from certain loans and financial assets (counting toward contractually guaranteed minimum repayment amounts in chronological order);
-
a new and comprehensive collateral package that secures the 2020/2023 bond and the 2021/2026 bond on a pari passu basis and is governed by a new creditors’ agreement;
-
A limit on the assumption of additional debt at the ACCENTRO Real Estate AG level;
-
the interest coverage ratio clause relating to the incurrence of financial liabilities is replaced by new provisions regarding the incurrence of financial liabilities, including a debt ceiling of EUR 225 million for property-holding companies;
-
The secured LTV clause is replaced by an LTV clause of 30% for real estate-holding companies;
-
ACCENTRO’s obligation not to pay dividends or make other distributions to shareholders of ACCENTRO Real Estate AG;
-
no further acquisitions of new investment properties until 80% of the face value of the 2020/2023 bond has been repaid;
-
certain restrictions on the acquisition of inventory properties as long as certain thresholds for the repayment of the 2020/2023 bond have not been met;
-
certain restrictions regarding brokerage and guarantee activities; certain rules and regulations related to the sale of assets and the acquisition of inventory properties; and
-
more extensive reporting (including quarterly and annual investor conference calls).
ACCENTRO grants each holder of the 2020/2023 Bond who supports the refinancing—either by entering into the Lock-Up Agreement for the 2020/2023 Bond or by signing a brief letter of support— a support fee equal to 0.10% of the face value of their position in the 2020/2023 Bond, payable upon the refinancing becoming effective (the “Support Fee”). Key elements of the refinancing with respect to the 2021/2026 Bond include, among others:
-
An increase in the cash interest rate by 2 percentage points, from 4.125% to 6.125%;
-
Extension of the maturity date from the original March 23, 2026, to March 23, 2029;
-
Contractually guaranteed minimum cumulative repayments at par value: EUR 26 million by December 2026, EUR 52 million by December 2027, and EUR 60 million by February 2028;
-
Equal allocation of mandatory special repayments with the 2020/2023 bond once the repayment of the 2020/2023 bond reaches EUR 150 million;
-
a new and comprehensive collateral package that secures the 2020/2023 Bond and the 2021/2026 Bond on a pari passu basis and is governed by a new creditors’ agreement; and
-
amended bond terms that essentially reflect the changes to the 2020/2023 bond.
Executive Board
In light of the confidence shown and the continued support from bond investors, ACCENTRO will accelerate its plans to further strengthen the management team by appointing a second member to the Executive Board.
Next Steps
ACCENTRO will shortly initiate a process to obtain consent in accordance with the German Bond Act in order to carry out the refinancing of the 2020/2023 Bond. Corresponding announcements will be made available to investors in the 2020/2023 Bond in a timely manner.
Investors in the 2020/2023 Bond who have not yet signed the 2020/2023 Bond Lock-Up Agreement or who otherwise support the refinancing and wish to receive the support fee as a result should contact Perella Weinberg Partners (projectantelope@pwpartners.com), Houlihan Lokey (accentrohl@hl.com), or the Calculation Agent (Kroll Issuer Services Limited, Attn: Paul Kamminga, Arlind Bytyqi, Email: accentro@is.kroll.com, Website: https://deals.is.kroll.com/accentro). ACCENTRO aims to complete the refinancing in the coming weeks and will continue to work closely with the investors in the 2020/2023 bond and other stakeholders to finalize and implement the refinancing.
Cleansing Materials
ACCENTRO has posted a “cleansing” presentation on its website, which includes a financial update and additional information: https://investors.accentro.de/news/praesentation
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential real estate investor and market leader in apartment privatization in Germany. As of September 30, 2022, its real estate portfolio comprised approximately 5,200 units. In addition to Berlin, its regional focus is on cities and metropolitan areas in central Germany as well as the Rhine-Ruhr metropolitan region. ACCENTRO’s business activities encompass three core areas: the tenant-sensitive sale of apartments to private owner-occupiers and investors; the sale of real estate portfolios to institutional investors; the development and management of its own real estate portfolio; and the provision of services to third parties. The shares of ACCENTRO Real Estate AG are listed on the Prime Standard of the Frankfurt Stock Exchange (WKN: A0KFKB, ISIN: DE000A0KFKB3). www.accentro.de
Disclaimer
This press release was prepared by ACCENTRO Real Estate AG (together with its subsidiaries, the “Company”) solely for informational purposes and has not been independently reviewed. The Company reserves the right to amend or replace this press release at any time. This press release does not constitute an offer to sell or to issue securities of the Company in the United States of America or in any other jurisdiction, nor does it constitute a solicitation to buy or acquire securities of the Company, and should not be construed as such. It is provided for informational purposes only. Neither any part of this press release nor the fact of its distribution should serve as the basis for a contract, an obligation, or an investment decision, nor should it be relied upon as the basis for such a decision. The information contained in this press release is current as of the date of publication of this document and is subject to change without prior notice. The information contained in this press release may be updated, supplemented, revised, or amended, and such information may change materially in the future. The Company is under no obligation to update or keep the information contained in this press release current. The information contained in this press release has not been independently verified. No express or implied representation, warranty, or undertaking is made regarding the fairness, accuracy, completeness, or correctness of the information or opinions contained herein, and no reliance should be placed on them. Neither the Company nor its respective affiliates, advisors, or representatives shall be liable in any way (whether through negligence or otherwise) for any losses arising from the use of this press release or its contents, or otherwise in connection with the press release. All proposed terms in this document are for illustrative purposes only and are not legally binding. This press release is intended solely for the recipient’s use. This press release (or any part thereof) may not be reproduced, distributed, or disclosed, nor may its contents be otherwise communicated, directly or indirectly, to other persons without the Company’s prior written consent. The information in this press release is not intended as investment, legal, or tax advice. You should consult your own legal counsel, accountant, and other advisors for legal, tax, business, financial, and other advice regarding the purchase of securities. This press release contains “forward-looking statements.” Forward-looking statements are based on the Company’s estimates and assumptions, as well as on information currently available to the Company, and include, among other things, statements regarding the Company’s business, financial condition, strategy, operating results, certain plans, objectives, assumptions, expectations, outlook, and beliefs, as well as statements regarding other future events or prospects. Forward-looking statements include all statements that are not historical facts and are identified by the use of forward-looking terms such as “believe,” “expect,” “plan,” “intend,” “aim,” “anticipate,” “estimate,” “predict,” “potentially,” “assume,” “continue,” “may,” “will,” “should,” “could,” “is expected to,” “risk,” or the negation of these terms or similar expressions, which constitute or indicate predictions of future events and future trends. Forward-looking statements are inherently subject to risks and uncertainties, as they relate to events and depend on circumstances that may or may not occur in the future. Please note that forward-looking statements are not a guarantee of future performance, and that the Company’s actual operating results, financial condition, and liquidity, as well as developments in the industry in which the Company operates, may differ materially from those expressed or implied by the forward-looking statements contained in this press release. The company assumes no obligation and does not intend to update these forward-looking statements.
Investor Relations Contact:
Thomas Eisenlohr
ACCENTRO Real Estate AG
Kantstraße 44/45
10625 Berlin
Email: eisenlohr@accentro.de
Phone: +49 (0)30 88 71 81 272