| The Nominations: Capital Markets ‘Deals of the Year’ |
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Private Placements
Grafton Group plc
Issuer: Grafton Group plc
Value of transaction: US$325 million
Arranger (s): Bank of Ireland Corporate Banking, with Macquarie Securities (USA) Inc acting as Placement Agent
Term: 7yr, 10yr
Date of transaction: 05/2005
Profile: The US private placement market provides a very attractive source of long term financing for Irish issuers as there is a strong demand for European credits and tremendous capacity with c. US$30 billion in annual issuance within the overall private placement market. The market can be very flexible and tailored to the specific requirements of the issuer in areas such as maturity (out to 30 years) structure and terms, competing very effectively with bank terms and pricing. This market is dominated by US insurance companies who account for c. 84 per cent of the market with the main investors being Prudential, Teachers, John Hancock and Met Life. Significant deal sizes can be catered for, with issuers either investment grade or non-investment grade and placements both secured and unsecured.
Both the Grafton Group plc (US$325 million) and Kingspan Group plc (US$200 million) accessed this market in 2005 for debt funding. Both deals were arranged by Bank of Ireland Corporate Banking with Macquarie Securities (USA) Inc acting as Placement Agent. Bank of Ireland Global Markets was awarded the swap auction mandate in both transactions. Industry publications credited both transactions as having been aggressive with tight spreads achieved, relative to other companies in comparable sectors.
Quinn Group Ltd
Issuer/borrower: Quinn Group Ltd
Value of transaction: US$300 million
Arranger(s): Barclays
Legal adviser: A&L Goodbody
Term: 5/7/10 year tranches
Date of transaction: 14/10/05
Maturity: Oct 2015
Profile: Quinn Group Ltd is one of the largest privately owned companies in Ireland. The Group completed a US$300m US Private Placement arranged by Barclays Capital, in conjunction with a 5 year RCF, also arranged by Barclays Capital.
Both facilities were structured on a pari passu basis, into the main Quinn Group holding company, with guarantees from the operating subsidiaries.
This was an innovative refinancing for the following reasons:
• It refinanced all the Group’s debt at subsidiary company level into new debt at holding company level. Previously the Group he new structure is much cleaner and provides flexibility for future growth.
• The new USPP and RCF facilities are unsecured facilities - previously all debt within the Group was secured.
• The USPP provided longer debt maturity, providing a more appropriate capital structure, given the Quinn Group’s long term cash generative assets.
• The new facilities provided a substantial reduction in margin/coupon to the Quinn Group.
• Both USPP and RCF facilities were sole arranged by Barclays, involving debt capital market teams in London and New York, co-ordinated by Barclays Ireland. Barclays Ireland provided all the hedging and risk management requirements relating to the facilities.
Kingspan Group plc
Issuer/borrower: Kingspan Group plc
Value of transaction: US$200 million
Arranger(s): Bank of Ireland Corporate Banking, with Macquarie Securities (USA) Inc acting as Placement Agent
Term: 10yr, 12yr
Date of transaction: 03/2005
Profile: See profile for Grafton deal.
Equity and Equity Linked Deals
Anglo Irish Bank
Company: Anglo Irish Bank Corporation plc
Number of shares: Equity placing of 33.6m shares
Value of transaction: ?416 million
Date of transaction: 19/01/06
Financial adviser: Davy Corporate Finance
Lead Arranger: Davy
Profile: Davy, as sole arranger, placed 33.6 million new ordinary shares in Anglo Irish Bank at a price of €12.40 per share raising approximately €416 million. The placing is believed to have been the largest ever by an ISEQ listed company and was more than four times oversubscribed. Anglo has utilised the funds raised to support its ability to grow its loan book in its three key geographic locations – namely Ireland, the UK and the US.
An interesting feature of the placing, apart from its magnitude, was the manner in which it was communicated to the market. Unusually in an Irish context, the intention to arrange the placing was announced before any bookbuilding exercise had taken place and Davy subsequently completed an accelerated bookbuild of ?416 million worth of Anglo’s shares within a matter of hours.
Newcourt Group plc
Company: Newcourt Group plc
Transaction: AIM/IEX Flotation
Financial adviser: Davy Corporate Finance
Broker: Davy
Legal adviser: A&L Goodbody
Date of transaction: 11/05
Market Capitalisation: c. ?48m (at flotation)
Market Capitalisation: c. ?96m (current)
Profile: In November 2005 Davy placed ?14 million of Newcourt Group plc with institutions in Ireland, the UK and Europe as part of the admission of Newcourt to listing on AIM and IEX. Newcourt Group plc is the holding company of a group that operates in the outsourced service sector with operation in security and recruitment. Newcourt was established in 2002 by Ted O’Neill and Phil Sykes with the support of institutional and private investors. Since then Newcourt has completed seven acquisitions, two of which have been completed since the admission to AIM and IEX. Since the flotation in November, the market price has more than doubled in a strong liquid aftermarket.
Irish Estates plc
Company: Irish Estates plc
Transaction: AIM/IEX Flotation
Financial adviser: Davy Corporate Finance
Broker: Davy
Legal adviser: Matheson Ormsby Prentice
Date of transaction: 30/09/05
Market Capitalisation: c.E32m (at flotation)
Market Capitalisation: c.E74m (current)
Profile: In December 2004 Davy Corporate Finance advised Niall McFadden on the simultaneous acquisition of Irish Estates (Management) Limited and Vector Workplace and Facilities Management Limited. This was an innovative transaction which utilised a combination of pre-IPO institutional equity, equity rollover and bank debt to fund the acquisitions. This was the first time for a number of years that Irish and UK institutional equity invested in a pre-IPO Irish company. The combined entity, Irish Estates plc was subsequently admitted to AIM and IEX on 30 September 2005 at a price of E1.30 per share.
Securitisat-ion
First Active plc
Issuer/borrower: First Active
Value of transaction (E m): E1.75 billion
Legal adviser(s): McCann Fitzgerald and Lovells
Arranger(s): Royal Bank of Scotland
Term: 6.3 years
Margin: Class A1 notes: 1 month Euribor + 5 basis points
Class A2 notes: 1 month Euribor + 12 basis points
Class B notes: 1 month Euribor + 27 basis points
Maturity: March 2012
Date of transaction: November 2005
Profile: This was the largest Irish residential mortgage securitisation deal issued to date and it was the ninth deal from First Active. First Active, through the Celtic programme, has a long and established history of securitisation and is well placed to obtain advantageous and diversified funding. The deal was structured by three tranches of notes to target different investors. There was a fast-pay AAA tranche with a weighted average life of one year which priced at E1m + 5bps and represented 35 per cent of the deal, a slow-pay AAA tranche with a weighted average life of 4.9 years which priced at E1m + 12bps and represented 61 per cent of the deal, and a slow pay A tranche with a weighted average life of 5.7 years which priced at E1m + 27bps and represented 4 per cent of the deal. A very extensive road show was undertaken in Dublin, London, Paris, Amsterdam, The Hague, Munich, Frankfurt, Oslo and Stockholm. The main benefits of this transaction were two fold: firstly, the all in cost of this transaction was Euribor +12 bps for 6.3 year funding as RMBS investors seek diversification and as this was the first Irish securitisation deal in over two years there was significant demand and over subscription for each tranche. Secondly, the capital released through the transaction was approximately E70m as the mortgages are removed from the balance sheet for regulatory capital.
AERCAP
Issuer: AerCap (formerly debis AirFinance) and Aircraft Lease Securitisation Limited (ALS)
Value: US$1bn
Legal Adviser: McCann FitzGerald and Milbank Tweed Hadley and McCloy, LLP
Tax adviser: KPMG
Margin: G-1A Notes: Libor +0.40p.c.; G-2A Notes: Libor +0.45p.c.; C-1 Notes: Libor +3.75p.c.; and D-1 Notes: Libor +6.50p.c.
Maturity Expected final payment date, 2016; Final Maturity Date 9 September 2030
Date of transaction: 15/09/05
Orkney Re II plc
Issuer: Orkney Re II plc
Total value of transaction: US$ 562.69 million
Legal adviser(s): William Fry (Irish); LeBoeuf, Lamb, Greene & MacRae LLP (US)
Arranger(s): Goldman Sachs & Co. (Lead Manager and Bookrunner); Scottish Re Capital Markets; Lehman Brothers; HSBC; RBC Greenwich Capital
Maturity: 30 years
Date of transaction: 20/12/05
Profile: Orkney Re II was established as an Irish securitisation vehicle by the Scottish Re Group for the purposes of raising long-term finance for certain US statutory reserves associated with level-premium term life insurance policies. This transaction pioneers a new methodology in structured finance to specifically relieve the capital strain associated with the requirement to hold excess or ‘XXX’ reserves (the difference between US statutory reserves and economic reserves). Scottish Re Group is a global life reinsurance specialist.
Orkney Re II entered into a reinsurance agreement with Scottish Re (U.S.) in respect of a defined block of life policies. A portion of the proceeds of the notes issued by Orkney Re II were then deposited in a trust account for the benefit of Scottish Re (U.S.) to enable it to obtain credit for the reinsurance in its financial statements.
The balance of the proceeds from the notes is available to fund future reserving requirements.
The Series A-1 Notes are guaranteed by a monocline insurer and are rated ‘AAA’ by S&P and ‘Aa1’ by Moodys. The Series A-2 Notes, an uninsured tranche ranking pari passu with the A-2 Notes, are rated ‘A-’ by S&P and ‘Aa2’ by Moody’s. The subordinated Series B Notes are rated ‘BBB+’ by S&P and ‘Baa2’ by Moody’s. Scottish Re Group companies hold the remaining securities issued by Orkney Re II.
This transaction was innovative for a number of reasons including:-
• This was the first XXX securitisation outside the US
• The Financial Regulator approved the issuer as a reinsurance company and approved the Offering Circular
• The Series A, B and C Notes were listed on the Official List of the Irish Stock Exchange
• Innovative profit extraction structures were devised
• The issuer was established as an ‘orphan’ in the sense that its voting share capital was held by or on behalf of a share trustee
• Various novel tax and accounting issues arose during the course of the transaction;
• This was the first XXX securitisation with fully-marketed unwrapped tranches, providing the first step in creating a market for XXX securitisations without the need for a bond guarantor
• This was the first XXX securitisation to issue subordinated debt tranches, improving the capital efficiency of the structure and expanding the market for XXX-related debt instruments
Orkney Re II provides an innovative solution to Scottish Re’s excess reserve strain, establishes a benchmark standard for the industry and accelerates the pace of financing for the life insurance and reinsurance industries as a whole. This transaction reflects major advances in insurance and capital markets convergence and moves the life insurance industry towards a more capital efficient model.
REO
Issuer: Opera Finance (CMH) p.l.c.
Value: E375,000,000
Issue: E375,000,000 Commercial Mortgage Banked Floating Rate Notes due 2015
Legal adviser: McCann FitzGerald and Allen & Overy (Eurohypo AG); Arthur Cox (REO)
Tax adviser: KPMG; Arthur Cox (REO)
Arranger: EUROHYPO AG
Bookrunner: Morgan Stanley
Term: Seven year loan secured against 14 Irish properties
Margin: Class A Notes – Euribor + 0.19p.c.; Class B Notes – Euribor + 0.30p.c.; Class C Notes – Euribor + 0.50p.c.; Class D Notes – Euribor + 0.80p.c.
Date of transaction: 15/02/06
Profile: This was the first Irish commercial mortgage-backed securitisation (CMBS). The loan was secured against 16 retail and office properties – 15 in Dublin and one in Cork.
PREPS
Issuer/borrower: PREPS 2005-2 plc
Value of transaction: E360 million
Legal adviser(s): Matheson Ormsby Prentice
Arranger(s): JP Morgan and HVB
Term: 7 years
Maturity: 2012
Date of transaction: 12/05
Profile: Matheson Ormsby Prentice advised JPMorgan, HVB and PREPS 2005-2 plc on the issue of E360m preferred pooled securities. This was the first time an Irish issuing company had been used as part of the PREPS programme designed by CEG. The transaction securitised profit participating agreements with German, Austrian, Belgian, Italian and Swiss SMEs. The purpose of the PREPS structure is to raise finance from the capital markets for European SMEs who would otherwise find it very difficult to access such financing.
Capital Issues
Vega ContainerVessel 2006-1 plc
Issuer: Vega ContainerVessel 2006-1 plc
Value and Number of shares: Total funding of US$800 million divided into three tranches of fixed rate debt issued by an Irish special purpose company, backed by 12 container ships purchased by 12 separate Irish companies and chartered to French shipping company, CMA CGM SA.
Legal Adviser: McCann FitzGerald advised BNP Paribas (transaction arranger) on Irish law, Clifford Chance advised BNP Paribas on English law and Freshfields Bruckhaus Deringer advised CMA CGM on English law and French law.
Term: 8 years
Maturity: Final legal maturity at 2021
Date of transaction: 02/06
Spread: Mid swaps + 50 bps for the AAA rated Class A Notes (wrapped by XLCA)
Profile: This was the first enhanced European equipment trust certificate transaction for the container shipping industry - CMA CGM SA.
DEPFA Bank
Issuer/borrower: DEPFA BANK plc
Value of transaction: E500m
Legal adviser(s): Issued off DEPFA’s EMTN programme (Clifford Chance & McCann Fitzgerald are advisors on the programme)
Arranger(s): BNP Paribas, Goldman Sachs, JP Morgan
Term: 10years (non-call 5y)
Maturity: 15th December 2015 (one time callable in 2010)
Date of transaction: 5/09/05
Coupon: 3 month Euribor +20 bps for the first 5 years,
3 month Euribor +70 bps thereafter.
Spread: 3 month Euribor +24 bps (reoffer).
Profile: The main objective of this inaugural Lower Tier 2 (LT2) benchmark transaction was to optimise DEPFA’s capital structure in very favourable market conditions.
The market was well disposed to LT2 deals in the run up to this deal, reflected in the strong demand for such paper and the corresponding all-time lows at which most LT2 secondary levels were trading. Another characteristic of the market was the shift in demand towards FRN structures due to the very low interest rate environment. Both of these factors created a positive setting for this deal and ultimately fuelled the strong demand in this issue.
Prior to the deal a team from DEPFA undertook a short but focused roadshow, meeting investors in London and holding a conference call for European investors.
Based on feedback from this roadshow regarding spread expectations of some key investors and the trading levels of comparable LT2 FRNs, the order book was officially opened on 5th September with a spread guidance of 3 month Euribor +25 - 27 basis points. Strong momentum was created from the start of official book-building and the order book was in excess of E1bn by 11.00am resulting in the revision of the spread guidance from 3 month Euribor +25-27 basis points to 3 month Euribor +25 basis points area.
The final spread by midday was 3 month Euribor +24bp at which point the total order book was in excess of E1.3 billion. The E500 million transaction was launched and priced that afternoon with a final pricing of 3 month Euribor + 24bp (ISIN Code XS0229524128).
Anglo Irish Bank
Issuer/borrower: Anglo Irish Bank
Value of transaction: E430m
Number of shares:
Legal adviser(s): Matheson Ormsby Prentice
Arranger(s): BNP Paribas and Barclays Capital
Date of transaction: 06/05
Profile: This transaction was arranged by BNP Paribas and Barclays Capital as lead managers to the issue of Stg?300 million of core Tier 1 Capital preference shares by Anglo Irish Bank in June 2005. The issue of preference shares was structured so as to permit investors to acquire Perpetual Tier-One Pass-Through Securities reflecting the return on the preference shares. This is a ground-breaking structure and is the first time such a structure has been implemented to raise Tier 1 Capital by an Irish bank. Anglo Irish Bank has reported that this issue is the largest ever issue of preference shares by an Irish financial institution and was substantially oversubscribed. The issue was placed with over 40 UK and European financial institutions and pension funds.
EBS Building Society
Issuer/borrower: EBS Building Society
Value of transaction: ?125 million
Number of shares: Issue of ?125 million Tier-1 Capital Securities
Legal adviser (s): Arthur Cox (EBS); A&L Goodbody/Allen & Overy (ABN AMRO)
Arranger (s): ABN Amro Bank N.V.
Term: Perpetual Tier-1 Capital Instruments
Date of transaction: 07/05
Profile: This was the first issue of Tier-1 Capital Securities by an Irish building society for over 10 years. The transaction was structured through a Luxembourg newly incorporated subsidiary and utilised a repackaging vehicle, Chess Capital Securities plc.
Covered Bonds
Bank of Ireland Mortgage Bank
Issuer: Bank of Ireland Mortgage Bank
Value of transaction: E2 billion
Legal advisors: McCann Fitzgerald (Bank of Ireland); Arthur Cox (Barclays Capital)
Arranger(s)/Bookrunners: Barclays, Davy Stockbrokers, Dresdner, IXIS Corporate & Investment Bank
Term: 10 years
Margin: MS + 6
Maturity: 22/06/2015
Date of transaction: 14/06/05
Coupon: 3.25
Profile: This was the 2nd Irish ACS issue for Bank of Ireland, nine months after its acclaimed inaugural 5-year covered bond benchmark transaction. With a E4 billion order book, E3.3 billion of which was at re-offer, the issue was a blow out deal and was priced at the tight end of the range, with a re-offer level of mid swaps +6. After pricing, the deal was immediately bid at re-offer, reflecting the right pricing and the quality of the orders in the pot.
The longer maturity had a greater appeal to insurance companies compared to the inaugural deal. This, in addition to the two week road show in Europe and Asia, helped it to achieve a broad placement into 115 accounts in 18 countries.
DEPFA ACS Bank
Issuer/borrower: DEPFA ACS Bank
Value of transaction: $1.25 billion
Legal adviser(s): Sidley Austin LLP, McCann Fitzgerald
Arranger(s): Goldman Sachs, HSBC, Morgan Stanley
Term: 5 years
Maturity: 16th August, 2010
Date of transaction: 05/05
Coupon: 4.25p.c.
Spread: UST Apr 2010 +43 basis points
Profile: This US$1.25 billion 5-year bond issue was DEPFA’s 2nd US$ benchmark following the US$ 1 billion Benchmark issued in October 2003 which matures in October 2008. Following investor feedback regarding a 3 or 5 year maturity the decision was taken by DEPFA ACS Bank together with the joint book runners to target a 5 year maturity. The book building process started with an initial price guidance of ‘low to mid 40s vs. 5yr US Treasury’ for a size of US$1 billion. Due to good demand mainly out of the US and Asia, orders were taken in excess of US$1billion at this price guidance on the first day. Following this momentum the deal was launched on Tuesday 10th May with a price guidance of +43 bps vs. 5yr US Treasury. Books closed on Wednesday with a total order book of US$1.5 billion. The orderbook showed very little price sensitivity and the number of switches was minimal. The transaction was priced at +43 over the 5 yr US Treasury on early
Wednesday afternoon (ISIN Code DE000A0D2439). The deal was upsized to US$1.25 billion from US$1 billion to accommodate demand by high quality investors. Geographic distribution was concentrated in Asia with 53 per cent, followed by USA with 26 per cent and Europe with 21 per cent.
Loans
Jurys Doyle Hotel Group
Borrower: JDH Acquisitions Ltd
Value of transaction: E1.3bn
Legal advisers: A&L Goodbody (for the bank)
William Fry (for the borrower)
Arranger: AIB Corporate Banking Ireland (AIB CB Irl.) are the sole arranger, underwriter, security trustee, documentation and facility agent for the deal.
Term: 5 years
Maturity: October 2010
Date of transaction: 11/10/05
Profile: In 2005, the Jury’s Doyle Hotel Group plc became the subject of take-over speculation as developers sought to release excess value in the Group’s Irish assets. AIB CB Irl., amongst other Irish and international banks, were approached directly by Crownway Investments (the investment vehicle of John and Bernie Gallagher, who led the transaction for the borrowers) about financing a take-private of the Group. Given the complexity of the transaction and the level of competition from other bidders, key concerns for the borrowers were confidentiality, flexibility and speed.
On Friday, 16th September AIB CB Irl. were formally asked to provide E1.3 billion term facility to fund the take-private of Jury’s Doyle Hotel Group plc.
A team of key senior managers ensured that a term sheet was agreed and approved by the AIB board within tight time scales enabling the announcement to be made to the stock exchange on Monday, 19th September 2005
Unusually, the offer was conditional on achieving only 50 per cent acceptances from the shareholders. The AIB CB Irl. facility provided flexibility for either (1) gaining 50-80 per cent acceptances i.e. effective control or (2) more than 80 per cent acceptances where the Company could be fully privatised. In addition, the Borrowers required specific financing to acquire shares in the open market immediately post the formal offer announcement (thus invoking a mandatory offer), for which AIB CB Irl. incorporated into the facility.
JDH Acquisitions received 80 per cent+ acceptances and the target has now been taken private. AIB CB Irl. expect to syndicate the facility in the coming months. The deal allowed the consortium to retain control of a company that has strong family connections and to maximise shareholder value. It was also strategically important for AIB CB Irl. as it was the largest deal done in the Irish market in 2005.
Sean Dunne Jurys Hotels’ purchase and Group bid
Issuer/borrower: D.C.D. Builders Limited
Value of transaction: E542 million
Legal adviser(s): Gartlan Furey / Matheson Ormsby Prentice
Tax adviser: KPMG
Arranger(s): Ulster Bank Ireland Limited
Term: 2 years
Maturity: February 2008
Date of transaction: 10/05
Profile: In July 2005 Jurys Doyle Hotel Group sold the 4.84 acre Jurys Hotel, Ballsbridge by public tender for E275 million. Sean Dunne was the successful bidder against 13 others. Following the sale, Jurys sold the adjoining 2.16 acre Berkeley Court Hotel by selected tender in November 2005, with Sean Dunne again the successful purchaser at a bid of E135.275 million. This was one of the largest commercial land acquisition transactions in the history of the Irish Republic on arguably the finest development sites in the state.
Sean Dunne’s intention is to procure planning permission for a major mixed use development, and redevelop the hotels through his company DCD Builders Limited over a circa 7 year timeframe. Ulster Bank provided debt facilities to fund 100 per cent of the purchase of Jurys Hotel on a senior/junior basis. Further senior debt funding of E100 million was later approved to assist in the purchase of the Berkeley Court Hotel.
After acquiring the Jurys site, Sean Dunne commenced building a 27.8 per cent stake in Jurys Doyle Hotel Group Plc at a cost of circa E300m His initial strategy was to protect his position in relation to his site acquisitions but he continued to acquire shares and considered making a full bid for the company. He subsequently sold his stake and realised significant profit. In addition to loans to purchase the properties, Ulster Bank supported the share purchase with short-term share acquisition facilities.
When Jurys announced Sean Dunne was the successful purchaser, they required confirmation of committed funding within a 3 day period. The deal was notable in challenging the speed of delivery of the Credit approval process, with approval by the bank’s Credit Committee within 24 hours of receiving the proposal.
C&C Group plc
Issuer/borrower: C & C Group plc
Value of transaction: E520m
Legal adviser(s): Allen & Overy
Tax adviser: KPMG
Arranger(s): Ulster Bank Ireland Limited & Royal Bank of Scotland plc (Co-ordinating MLA), Bank of Ireland, AIB
Term: 5 years
Margin: 1p.c.
Maturity: 5 years
Date of transaction: 5/08/05
Profile: Ulster Bank, together with its parent the Royal Bank of Scotland (RBS), was very pleased to have led the refinancing of C&C’s existing E520 million facilities on 5 August 2005. Ulster Bank and RBS were the co-ordinating Mandated Lead Arranger (MLA) along with the two other MLAs in what was effectively a ‘re-pricing’ reflecting the strength of the loan markets. C&C lowered its costs significantly, reducing margins payable from 1.25 per cent to 1.00 per cent and adjusting the margin ratchet table accordingly. As the co-ordinating MLA, Ulster Bank and RBS structured the deal and subsequently acted as documentation agent and book-runner in the very successful syndication. This was a very important mandate win for Ulster Bank and as part of the RBS Group, particularly in the Irish market.
Airtricity Holdings (UK) Limited
Issuer: Airtricity Holdings (UK) Limited
Value of transaction: ?100,000,000
Legal adviser (s): Randal Doherty & Associates
Arranger (s): Dolmen Corporate Finance
Term: 3 years
Maturity: March 2009
Date of transaction: March 2006
Coupon: 12p.c. annual coupon
Profile: Airtricity is active in the development of wind-farms and their operation across a number of markets in Europe and USA. Although both activities are capital-intensive, Operations with its steadily rising free cash flows can be substantially project-financed, freeing up Airtricity equity to re-cycle back to the development phase, once a wind-farm is built. The development phase is equity intensive - not a place project finance banks are as yet comfortable to enter and Airtricity as an un-rated entity has had limited capacity to raise corporate bank debt.
The €100m Structured Loan Note raised through Dolmen Private Clients (with significant take-up by Airtricity management) steps into this vacuum, providing matching funds for Airtricity equity thus leveraging the level of development activity that can be undertaken.
The Loan Note was issued by Airtricity’s UK subsidiary, has a 3 year term, with an unfunded bullet repayment and 12p.c. coupon. Investors can redeem at each anniversary, while Airtricity can redeem at end year 2. Critical covenant is an asset cover ratio. Security is on all Airtricity’s development pipeline with a Put to Airtricity Holdco.
FBD Holdings plc
Borrower: FBD Holdings plc
Value of Transaction: E55m
Transaction: New E55m term loan to finance the redevelopment of the La Cala Hotel & Golf Resort.
Arranger: AIB Corporate Banking
Profile: FBD Holdings plc owns 100 per cent of the 5 star luxury La Cala Hotel & Golf Resort in Mijas, Costa del Sol, Southern Spain. The resort consists of three 18-hole golf courses, clubhouse, 5-Star hotel and over 2,000 luxury apartments and townhouses.
Following a strategic review and preparation of a 5-year plan, FBD accelerated the development activity at La Cala and are currently working on two new developments, Monte Alto and Real Altavista. The La Cala site is c.1,000 acres and with planning approval in place for the construction of over 2,000 new units, a mix of apartments, townhouses and individual villas.
The E55m term loan provided by AIB was used to finance expenditure on the 3rd golf course, infrastructure, resort enhancements, initial spend at Real Altavista and completion of construction at Monte Alto.
In 2006, FBD entered into a conditional agreement to sell c.240 acres of building development land of the La Cala site to Desarrollos Lar Sol MS. La Sol is owned by Grupo LAR SA (50 per cent) and the Morgan Stanley controlled MSREF Atlantic Holdings BV (50 per cent). The total gross consideration of the sale was E201m in cash. FBD remains majority owner and operator of the resort’s leisure interests and will complete and market its current residential building projects.
Private clients of BDO Simpson Xavier
Borrower: Private clients of BDO Simpson Xavier
Value of transaction: E37.4 million
Finance Providers: AIB Corporate Banking Ireland Property Division.
Legal Advisers: Ireland: McCann Fitzgerald, McEvoy Partners; Germany: WilmerHale, TraversSmith
Transaction: Amortising Loan of E28.5m to purchase an office building in Berlin –Vattenfall House.
Profile: In 2005, a consortium of investors assembled by BDO Simpson Xavier Real Estate purchased a large office building (19,343 sq mtrs) in Mitte, an important West Berlin location. The building is presently being refurbished and should be available for occupation in Summer 2006. Swedish Utility Group, Vattenfall, the fourth largest utility company in Europe, has agreed to lease the property for 10 years from completion.
BDO negotiated the purchase of the building in mid-2005 on a pre-let, fixed price contract from one of their German developer contacts who is currently refurbishing the premises. BDO’s private clients invested equity of E8.9m, with AIB Corporate Banking Ireland providing the debt of E28.5 million, secured on the property and rent roll only. The overall acquisition yield was c.6.5 per cent after all costs.
This was one of the first transactions to be conducted by Irish investors in Berlin, with the hope that it will provide strong returns in the medium term. |
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| Article appeared in the April 2006 issue.
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