Vivion notes’ refinancing completed, approved by 91% of bondholders

By Mary-Katherine Stinson

Lexington, Ky., Sept. 5 – Vivion Investments Sarl announced it completed the successful refinancing of its €700 million 3% senior notes due 2024 (ISIN: XS2031925840), its €640 million 3½% senior notes due 2025 (ISIN: XS2070311431) and its €200 million of 2.25% convertible bonds due 2025 (ISIN: XS2217646509), according to a press release.

There were €633.1 million outstanding of the 2024 notes and €601.7 million outstanding of the 2025 notes. All €200 million of the convertibles were outstanding.

“That 91% of Vivion bondholders across the three series supported the extension of the significant majority of our debt by more than five years is testament to their confidence in our strategy, portfolio, team, and growth trajectory. With a solid capital structure in place, we look forward to sharing our financial results for the first half of the year next week and continuing to execute our strategic objectives for the benefit of our investors,” Vivion chief financial officer Ella (Raychman) Zuker said in the press release.

As previously reported, Vivion announced that the eligibility condition; the successful consent condition and the minimum participation condition with respect to the 2025 notes and the convertible bonds were all satisfied. The minimum participation condition was waived for the 2024 notes.

The settlement of the exchange offer was conditional on the satisfaction of the remaining settlement conditions, the program update condition and the cancellation condition.

The program update was to take place on Aug. 24.

The confirmation date was Aug. 25.

Settlement had been set for Aug. 31.

Immediately following completion of the exchange offer, €182.9 million in aggregate principal amount of amended 2024 notes will remain outstanding.

As reported on July 31, the purpose of the exchange offer is to extend the issuer’s consolidated debt maturity profile.

Exchange offer

Vivion reported that €450.2 million, or 71.11%, of the 2024 notes, all €200 million of the convertible bonds and €578.02 million, or 96.09%, of the 2025 notes were tendered in the exchange offer.

€608,555,940 of new 2028 secured notes were issued, comprised of €360.16 million in principal amount issued to the 2024 noteholders and €248,395,940 issued to the convertible bondholders under the exchange offer for a total cash consideration of €90.04 million, excluding accrued interest.

€543.88 million of new 2029 secured notes were issued, comprised of €520.38 million issued to the 2025 noteholders under the exchange offer and €23.5 million issued to holders of the 2025 notes under the 2025 notes mandatory exchange for a total cash consideration of €57.82 million, excluding accrued interest.

In addition, Vivion reported that the extraordinary resolutions were passed at the meetings for the 2024 and 2025 notes.

As previously reported, Vivion took in the following early exchange instructions by the original early deadline, 11 a.m. ET on Aug. 10:

• €448 million, or 70.76%, of the outstanding principal amount in its offer to exchange any and all of the €633.1 million 2024 notes for 6½% plus PIK senior secured notes due 2028 plus the applicable cash consideration and accrued interest; and

• €577.3 million, or 95.94% of the €601.7 million outstanding of the 2025 notes (subject to the minimum exchange amount) for 6½% plus PIK senior secured notes due 2029 plus the applicable cash consideration and accrued interest.

To recap, the new secured notes consideration was previously announced at €80,000 of new notes for each €100,000 of 2024 notes and €90,000 of new notes for each €100,000 of 2025 notes.

The company also offered to exchange its €200 million 2.25% convertible bonds due 2025, all of which is outstanding. The exchange consideration for the convertibles will be a principal amount of new secured notes equal to the accreted principal amount for each €100,000 original principal amount of convertibles tendered for exchange.

The issuer was offering an early cash consideration of €20,000 for the 2024 notes and €10,000 for the 2025 notes. The late cash consideration is zero for both series.

Interest for the new notes is 6½% in cash. PIK interest for both series of new notes will be 1Ό% in year one, 1½% in year two, 1Ύ% in year three, 2% in year four and 2Ό% in year five.

Vivion said it pushed out the early exchange deadline to coincide with the expiration deadline, 11 a.m. ET on Aug. 17. At the initial early deadline, the minimum participation condition of 75% of the outstanding principal amount for each series had not been satisfied for the 2024 notes, but that condition has been waived, the company reported.

Consent solicitation

In addition, Vivion was soliciting consents from holders of the 2024 notes and 2025 notes to approve a proposal to amend the terms and conditions of the 2024 notes and 2025 notes that are not exchanged under the exchange offer.

In the case of the 2024 notes, the issuer was seeking consents to permit the granting of the transaction security with respect to the new secured notes and to amend the consolidated coverage ratio covenant and delete the unencumbered assets ratio and secured LTV covenants in the 2024 notes conditions, in each case, in order to align to the corresponding position in the 2028 new secured notes conditions.

In the case of the 2025 notes, the purpose of the consent solicitation was to amend the conditions so that the maturity date of the 2025 notes that are not exchanged will be the settlement date of the exchange offer and the redemption of those unexchanged 2025 notes will be effected by way of delivery of 2029 new secured notes in a principal amount equal to the principal amount of unexchanged notes, plus accrued interest paid in cash.

Holder support

Prior to the start of the exchange offer, the issuer had discussed the terms of the exchange offer and consent solicitation with noteholders that hold a material portion of all of the series of existing notes included in the offer. Specifically, this includes about 77% of the aggregate principal amount of the 2025 notes and 100% of the aggregate principal amount of the convertible bonds. In each case, those noteholders indicated that they intended to submit exchange instructions in the exchange offer.

While the indicative supporting holders were not subject to any obligation or commitment of any kind, those amounts are (i) relevant in respect of the 2025 notes since in the event that all of the indicative supporting holders participate in the exchange offer, the 2025 notes extraordinary resolution would be passed; and (ii) are relevant with respect to the convertible bonds given this would represent an exchange in full for 2028 new secured notes, which is a condition to the exchange offer.

2025 notes mandatory exchange

As the 2025 notes mandatory exchange was implemented, all of the 2025 noteholders that did not submit exchange instructions by the expiration deadline will have their unexchanged notes redeemed on the settlement date in consideration for an aggregate principal amount of new 2029 secured notes equal to the aggregate principal amount of unexchanged notes. If 2025 noteholders wished to receive the early exchange consideration, those noteholders were required to submit an exchange instruction prior to the early exchange deadline.

Conditions

Holders who wished to participate in the exchange offer had to tender their notes for exchange in an aggregate principal amount of each series that was sufficient to receive, in each case, at least €100,000 principal amount of new notes in the exchange offer; this is the minimum exchange amount.

Settlement of the exchange offer was conditioned on a number of conditions, which included tenders being received and accepted in an amount representing at least 75% of the aggregate outstanding principal amount of the 2024 notes, 75% of the aggregate outstanding principal amount of the 2025 notes and 100% of the aggregate outstanding principal amount of the convertibles.

Details

The lead dealer manager for the exchange offer and consent solicitation is BofA Securities Europe SA (+33 1 87 70 10 57; DG.LM-EMEA@bofa.com), and the dealer manager is Citigroup Global Markets Europe AG (+44 20 7986 8969; liabilitymanagement.europe@citi.com).

Kroll Issuer Services Ltd. (+44 20 7704 0880; attn.: Arlind Bytyqi / Jacek Kusion; vivion@is.kroll.com; https://deals.is.kroll.com/vivion) is the exchange and tabulation agent.

The issuer is a real estate investment trust registered in Luxembourg.

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