Deutsche Annington’s Grand refinancing gets approval

German housing group Deutsche Annington (DAIG) said on Friday that it has won the approval of roughly 90% of the noteholders for the refinancing of its multi-billion Grand securitisation vehicle.

The vote approving the refinancing is expected to take place on 14 December 2012, it added.

'I am pleased with the overwhelming support received from the Noteholders,' said Stefan Kirsten, CFO of DAIG. 'This support shows that the business model of DAIG is fully accepted by the capital markets. We look forward to successful implementation of the refinancing before the end of this year, which will secure the future of our customers, employees and shareholders.'

The five-year refinancing plan the maturity of the facility to 2018 and involves the payment of EUR 1.24 bn in the first year alone. The German Residential Asset Note Distributor (GRAND) CMBS vehicle was originally created in 2006 with the issue of EUR 5.8 bn of notes. The operation includes a EUR 504 mln equity injection from UK private equity firm and major shareholder Terra Firma.

The deal - said to be Europe's largest residential refinancing ever - will bring Grand's loan-to-value below the 60% threshold and reduce its outstanding debt to EUR 3.8 bn. Market experts believe the operation will also pave the way for a long-discussed public listing of Deutsche Annington in 2013 or 2014.

The group of noteholders, advised by Rothschild and Freshfields Bruckhaus Deringer, comprises BayernLB, ING Investment Management, JP Morgan, Landesbank Baden-Württemberg, Pimco and Standard Life Investments.

Deutsche Annington, advised by Blackstone and Allen & Overy, will repay EUR 700 mln in the second year, EUR 650 mln in each of the third and fourth years and the balance in the fifth year. As part of the agreement, the margin on the Grand notes is to be increased from 48 basis points to 165 basis points.

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