Grand City Properties says exchange, tender for two notes successful

By Marisa Wong

Los Angeles, April 10 – Grand City Properties SA announced the success of its April 2 invitation to holders of two series of subordinated notes to either (i) exchange any and all of their existing notes for new notes and cash or (ii) exchange a portion of the existing notes and tender the remainder for purchase, according to notices on Wednesday.

Specifically, Grand City Properties had invited holders of its outstanding €200 million undated subordinated notes subject to interest rate reset with a first call date in 2023 with a current coupon of 6.332% (ISIN: XS1491364953) and €350 million undated subordinated notes subject to interest rate reset with a first call date in 2023 with a current coupon of 5.901% (ISIN: XS1811181566), to either:

• Offer to exchange any and all existing notes of each series for exchange consideration comprising (a) newly issued euro-denominated undated subordinated notes subject to interest rate reset with a first call date in 2030, issued by Grand City Properties Finance Sarl and guaranteed by Grand City and (b) a cash amount; or

• Offer to exchange 85% in aggregate nominal amount of any and all existing notes of each series and tender 15% in aggregate nominal amount of any and all existing notes of each series for purchase for cash.

Final results

As of the expiration of the offers at 11 a.m. ET on April 9, holders had submitted €151.6 million of the 6.332% notes and €297.5 million of the 5.901% notes, representing about 76% and 85% of the outstanding notes, respectively.

The company will issue an aggregate of €409,529,000 of new notes, pay an aggregate cash amount of €22,155,850 and pay an aggregate tender consideration of €28,234,575.

The principal amounts to be repurchased under the tender offers is €13 million for the 6.332% notes and €21 million for the 5.901% notes.

After the transactions, €48.4 million of the 6.332% notes and €52.5 million of the 5.901% notes will remain outstanding.

New notes

The new perpetual notes to be issued in exchange for the existing notes will have an initial coupon of 6.125% and a first call date on Jan. 16, 2030. The interest rate will reset to the five-year mid-swap rate plus a margin of 350.8 basis points on April 16, 2030, 375.8 bps on April 16, 2035 and 450.8 bps on April 16, 2050.

The new hybrid notes are subject to a minimum issue size of at least €150 million.

The company said that because the new issue minimum size condition was met, it will accept all of the existing noteholders’ offers to participate.

Settlement is expected to be on April 16.

Consideration details

As previously announced, the exchange consideration for the 6.332% notes consists of a principal amount of new notes equal to 100% of the aggregate nominal amount of 6.332% notes accepted for exchange and a cash amount equal to 6% of the aggregate nominal amount of 6.332% notes accepted for exchange.

The tender consideration for the 6.332% notes is an amount in cash equal to 85.75% of the aggregate nominal amount of 6.332% notes accepted for exchange.

The exchange consideration for the 5.901% notes consists of a principal amount of new notes equal to 98% of the aggregate nominal amount of 5.901% notes accepted for exchange and a cash amount equal to 5% of the aggregate nominal amount of 5.901% notes accepted for exchange.

The tender consideration for the 5.901% notes is an amount in cash equal to 81.25% of the aggregate nominal amount of 5.901% notes accepted for exchange.

The company will also pay accrued interest.

The dealer managers for the offers are BofA Securities Europe SA (+33 1 877 01057; DG.LM-EMEA@bofa.com), Citigroup Global Markets Ltd. (+44 20 7986 8969; liabilitymanagement.europe@citi.com), Goldman Sachs International (+44 20 7774 4836; liabilitymanagement.eu@gs.com) and J.P. Morgan SE (+44 20 7134 2468; liability_management_EMEA@jpmorgan.com)

Kroll Issuer Services Ltd. (+44 20 7704 0880; gcp@is.kroll.com; https://deals.is.kroll.com/gcp; attn.: Owen Morris) is the exchange agent.

Grand City Properties is a Luxembourg-registered specialist real estate company focused on investing in and managing value-added opportunities in the real estate property market in Germany, primarily in densely populated areas.

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