Latvian-based Property Group RB Management (RBM) has announced that Acme Corporation, one of the companies services by the group, has negotiated a discounted repurchase of subordinated debt securities.
Latvian-based Property Group RB Management (RBM) has announced that Acme Corporation, one of the companies services by the group, has negotiated a discounted repurchase of subordinated debt securities.
The Acme bonds were purchased at a price of 12.47 cents on the euro, or an 87.5% discount. RBM said the transaction provides a pricing benchmark, and creates opportunities for better recapitalisation in the future.
'This recent sale reflects the current situation in the real estate market. Capitalization rates have risen significantly, while rental incomes have shrunk, thus the value of a property is often at or below the value of existing bank debt and the value of own or subordinated capital is close to zero. As a result secured creditors require either additional investments into capital or reduction of existing liabilities,' said Pauls Platais, Partner of Catella Corporate Finance.
The Acme bonds were originally issued at the end of April 2009 in exchange for Apex Investments bonds, with 8% annual yield and maturity in April 2013. After the current sale, the group now has 4,980 bonds remaining with total nominal value of approximately EUR 6 mln. It is planned to list the bonds on NASDAQ OMX Riga Stock Exchange in April 2010.
Property group RBM is a closely held real estate investment and development concern that has been investing in Baltic real estate since 1995.
