NEXT Properties terminates exchange offers for Fibra Uno notes

By Marisa Wong

Los Angeles, March 12 – Trust 7401, a trust formed under the laws of Mexico, (NEXT Properties) announced on Tuesday that it has terminated its four separate offers to exchange four series of outstanding senior notes issued by Trust 1401, a trust formed under the laws of Mexico, (Fibra Uno) for new senior notes to be issued by NEXT Properties. The offers were launched on Nov. 13.

NEXT Properties has decided to cancel the exchange offers in light of recent developments in the Mexican real estate market, including the trust’s offer to enter into a joint transaction involving its industrial portfolio with Fibra Terrafina. Tuesday’s press release confirms the termination of the exchange offers.

Because the exchange offers have been terminated, the total consideration or tender consideration and the cash payment consideration will not be paid to holders who tendered their Fibra Uno notes. The tendered notes will be promptly returned to the tendering holders.

Offer details

The offers had been set to expire at 5 p.m. ET on April 16. The expiration time had been extended several times, as previously reported.

However, because the offer was fully subscribed at the early tender date, holders who tendered their notes for exchange after the early deadline were not expected to have their notes accepted, unless the maximum exchange amount were to be increased or if the offer were to become under-subscribed due to the exercise of revocation rights.

Consummation of each exchange offer was subject to the condition that Trust 2401, a Mexican trust also known as Fibra NEXT, consummate its initial public offering; the exchange offer had been extended to allow more time for that to occur.

In a press release on March 1, the company granted withdrawal rights to noteholders who already tendered their notes. Noteholders had until 5 p.m. ET on March 8 to exercise withdrawal rights. The withdrawal deadline had previously ended at 5 p.m. ET on Nov. 27, but was open again from Jan. 25 to Jan. 29. However, even with the withdrawal rights reopened in January, none of the exchange offers became under-subscribed.

As previously reported, as of the early deadline in November, the following were tendered:

• $451,766,000 of the $800 million outstanding 5¼% senior notes due 2026 (Cusip: 898324AC2, P9406GAC2) issued by Fibra Uno, with $400 million accepted at a proration rate of 86.49%;

• $560,046,000 of the $775 million outstanding 4.869% senior notes due 2030 (Cusip: 898339AA4, P9401CAA0) issued by Fibra Uno, with $387.5 million accepted at a proration rate of 66.4%;

• $396,715,000 of the $700 million outstanding 6.95% senior notes due 2044 (Cusip: 898324AB4, P9406GAB4) issued by Fibra Uno, with $350 million accepted at a proration rate of 85.44%; and

• $603,222,000 of the $875 million outstanding 6.39% senior notes due 2050 (Cusip: 898339AB2, P9401CAB8) issued by Fibra Uno, with $437.5 million accepted at a proration rate of 69.8%.

The amount of notes accepted in each series was the maximum amount the issuer had said it would accept.

The total consideration for each series was $1,000 per $1,000 principal amount. The total consideration included an early tender premium of $50 per $1,000 of notes tendered by the early tender date. Announced on Jan. 25, the issuer introduced an additional $1.25 per $1,000 note cash payment consideration to all tendering noteholders.

Holders whose notes are accepted for exchange were not entitled to receive accrued interest in cash, because interest on the new notes would accrue from the last interest payment date for the corresponding existing Fibra Uno notes and would be paid by NEXT Properties on the first interest payment date of the corresponding series of new notes received in exchange for the existing notes.

The tendered notes were to be exchanged as follows:

• The accepted Fibra Uno 2026 notes were to be exchanged for $400 million senior notes maturing on Jan. 30, 2026 with a coupon of 5¼% to be issued by issued by NEXT Properties

• The accepted Fibra Uno 2030 notes were to be exchanged for $387.5 million senior notes maturing on Jan. 15, 2030 with a coupon of 4.869% to be issued by NEXT Properties;

• The accepted Fibra Uno 2044 notes were to be exchanged for $350 million senior notes maturing on Jan. 30, 2044 with a coupon of 6.95% to be issued by NEXT Properties; and

• The accepted Fibra Uno 2050 notes were to be exchanged for $437.5 million senior notes maturing on Jan. 15, 2050 with a coupon of 6.39% to be issued by NEXT Properties.

Settlement was expected to occur promptly after the new expiration date. The company had determined not to have an early settlement date.

The exchange offers were being made, and the new notes were being offered, only to qualified institutional buyers under Rule 144A and to noteholders outside the United States who are persons other than U.S. persons under Regulation S.

BBVA Securities Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were dealer managers in connection with the exchange offers.

The exchange and information agent was D.F. King & Co., Inc. (888 626-0988 or, for banks and brokers, 212 269-5550; funo@dfking.com; www.dfking.com/funo-next).

The real estate investment trusts are based in Mexico City.

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