CBRE Investment Management, on behalf of a fund sponsored by the firm, has successfully issued a Danish bond, raising €49 mln (DKK 368 mln).
The bond has been financed in the local market by a well-known Danish financial institution and a top-three lender in the Danish mortgage market.
The bond will be used by CBRE IM to repay the outstanding balance on the fund’s subscription facility and creates balance sheet for the financing of future acquisitions.
The bond is secured by three Danish residential assets that have been acquired over the past two years and were initially funded with equity. The most recent transaction is two multi-family properties in Ballerup, Greater Copenhagen.
This portfolio comprises 16,974 m2 of high-quality residential space made up of 222 affordable rental units for middle-income households. The assets boast excellent environmental credentials and have DGNB Gold certification.
Duco Mook, EMEA head of treasury & debt financing at CBRE IM, said: 'In the context of today’s challenging credit market, this closing is an exceptional achievement and one that will put the fund in a prime position to access new opportunities in the market, in 2024 and beyond.
'The cost of debt remains extremely attractive in Denmark, compared to other European countries. Overall, the bond issuance has only a limited impact on the fund’s weighted average cost of debt and the fund-level loan to value (LTV) will remain well below our 25% target.
'The issuance of this bond marks another important milestone in our long-term strategy for this fund, whereby different financial products are used to optimise the balance sheet while securing debt that is accretive to returns.'
The bond has a maturity of five years, with extension options of up to 30 years in total. An all-in fixed interest rate (coupon) of 3.6% was achieved, consisting of a margin of 0.5% and a base rate of 3.1%.
