Aroundtown accepts 90% of existing perpetuals for exchange, purchase

By Marisa Wong

Los Angeles, May 1 – Aroundtown SA completed its voluntary exchange and tender offers for its £400 million outstanding undated subordinated notes with a first reset date of June 25, 2024 (ISIN: XS2017788592), currently bearing interest at 4.75%, and $700 million outstanding undated subordinated notes with a first reset date of July 21, 2023 (ISIN: XS1634523754) issued by AT Securities BV and guaranteed by Aroundtown, of which $58.5 million is held in treasury, with a current coupon of 7.747% and next reset date of July 21, 2028.

An average of 90% of the existing perpetual notes were submitted and accepted by Aroundtown, according to a Wednesday press release.

As a result, the company will issue in exchange for the old notes roughly $494 million and £345 million of new perpetual notes across two different series and simultaneously repurchase $60 million and £35 million of perpetual notes via the tender offer.

The company had invited holders of the two series of existing subordinated notes to either exchange any and all of their existing notes for new notes and cash or exchange a portion of the existing notes and tender the remainder for purchase.

Specifically, the company invited holders to either:

• Offer to exchange any and all of the sterling or dollar notes for (a) newly issued sterling- or dollar-denominated, as applicable, undated subordinated notes subject to interest rate reset with a first call date in 2029, issued by Aroundtown Finance Sarl and unconditionally and irrevocably guaranteed on a subordinated basis by Aroundtown and (b) a cash amount; or

• Offer to exchange 80% in aggregate nominal amount of any and all of the existing sterling or dollar notes in the exchange offer and tender 20% in aggregate nominal amount of any and all of the sterling or dollar notes for purchase for cash.

Results

Aroundtown accepted $554 million, or 86%, of the $641.5 million of dollar notes outstanding at the start of the offers and repurchased $60 million of the dollar notes under the tender offer, leaving $87.6 million of the dollar notes remaining outstanding.

The company accepted £380 million, or 95%, of the £400 million of sterling notes outstanding at the start of the offers and repurchased £35 million of the sterling notes under the tender offer, leaving £20.4 million of the sterling notes remaining outstanding.

The company issued $493.7 million of new 5.836% notes due August 2029 and £344.8 million of new 6.95% notes due May 2029. The initial coupons are euro coupons swapped from dollar and sterling coupons, respectively.

Consideration

As previously reported, the exchange consideration for the sterling notes consisted of a principal amount of new notes equal to 100% of the aggregate nominal amount of sterling notes accepted for exchange and a cash amount equal to 4% of the aggregate nominal amount of sterling notes accepted for exchange.

The tender consideration for the sterling notes was an amount in cash equal to 68.2% of the aggregate nominal amount of sterling notes accepted for exchange.

The exchange consideration for the dollar notes consisted of a principal amount of new notes equal to 100% of the aggregate nominal amount of dollar notes accepted for exchange and a cash amount equal to 3% of the aggregate nominal amount of dollar notes accepted for exchange.

The tender consideration for the dollar notes was an amount in cash equal to 67.5% of the aggregate nominal amount of dollar notes accepted for exchange.

New notes

As previously announced, the new sterling-denominated perpetual notes offered in exchange for the sterling notes have an initial coupon of 8.625% and a first call date on May 7, 2029. The interest rate will reset to the applicable U.K. government security benchmark plus a margin of 449.3 basis points on Aug. 7, 2029, 474.3 bps on Aug. 7, 2034 and 549.3 bps on Aug. 7, 2049.

The new dollar-denominated perpetual notes offered in exchange for the dollar notes have an initial coupon of 7.875% and a first call date on Aug. 7, 2029. The interest rate will reset to the applicable U.S. Treasury benchmark plus a margin of 316.3 bps on Nov. 7, 2029, 341.3 bps on Nov. 7, 2034 and 416.3 bps on Nov. 7, 2049.

Each of the two new hybrid notes was subject to a minimum issue size, at least £150 million for the sterling notes and at least $150 million for the dollar notes.

Details

The offers were announced on April 22 and expired at 11 a.m. ET on April 30.

Settlement is slated for May 7, as previously noted.

The dealer managers for the offers are BNP Paribas (+33 1 55 77 78 94; liability.management@bnpparibas.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969; liabilitymanagement.europe@citi.com).

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

Together with previous transactions for euro-denominated perpetual notes, Aroundtown, together with Grand City Properties SA, have offered an exchange for all perpetual notes that have not been called in 2023 and 2024 and for the ones with call dates approaching in the next 12 months. A combined amount of 79% or roughly €2.8 billion aggregate nominal amounts of existing perpetual notes were submitted across all offers and accepted by the group, the company said in Wednesday’s press release.

As a result, the group issued about €2.5 billion of new perpetual notes across five different series and simultaneously repurchased over €230 million of perpetual notes via the tender offers, following the final closing of the current set of offers.

Aroundtown is a Luxembourg-based commercial real estate company.

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