Listed property giant Gagfah has announced the closing of a €1.06 bn loan with Bank of America Merrill Lynch for its 37,000-unit Woba residential portfolio.
Listed property giant Gagfah has announced the closing of a €1.06 bn loan with Bank of America Merrill Lynch for its 37,000-unit Woba residential portfolio.
The deal is one of the largest new financings in the German real estate sector in recent years. It allows the company to repay in full its previous loan of €1.04 bn, which was due to mature on 15 May 2013.
The new loan has a five-year maturity and is for 60% of the Woba portfolio's value (according to Gagfah's valuers) with a coupon of 3.90% which is 43 basis points lower than the 4.33% coupon of the previous loan.
The loan agreement provides for 1.0% amortisation per annum and covenants that are typical for residential real estate loans, the company said.
'This is the first of several financings we are planning to close during the first half of the year and it will help to optimise Gagfah's capital structure as a whole. It also strengthens Gagfah's role in the German residential market as a long-term owner,' CFO Gerald Klinck said.
The financing comes just two weeks after the Fortress-owned residential property group said it was discontinuing the Woba sale process as it reached closer to refinancing the properties.
Gagfah, which purchased the assets together with the loan in 2006, had carried out a structured bidding process for the package and received final bids close to the carrying value of that portfolio. However, CEO Stephen Charlton said refinancing the assets was 'a better alternative in spite of attractive bids for the portfolio'.
Gagfah has invested more than €180 mln on the Woba portfolio since acquiring it six years ago and said it plans to spend more than €100 mln over the next five years.
