The Selec portfolio, originally composed of 10,200 homes let to EDF in the context of a 12 year firm lease, was acquired by LBO France in 2006 in a joint venture with RREEF. The lease with EDF was renewed in 2010 for another 12 year period, renewable after 12 years. Over 25% of the units have been sold since 2006; today around 7,500 remain in the portfolio.
Proceeds from sales considerably deleveraged the portfolio, which, at acquisition, was financed via €960 million of debt. The new financing is structured in two tranches, the first of €420 million at a variable rate and a second of €200 million at a fixed rate (bullet loan). It has a five year maturity.
The financing was subscribed 40% directly and 60% through a securitization fund structured specifically for this operation and grouping together institutional investors. Stéphanie Casciola, Head of Real Estate funds at LBO France, stated: “The success of this operation attests to the confidence of our financial partners. We are delighted to have been able to bring about this major, innovatively structured refinancing operation.” Natixis participated as lead arranger for the refinancing. BNP Paribas Corporate Finance acted as placement agent for the fund, bringing together some of the institutional investors.
Thierry Bernard, Head of Real Estate Finance at Natixis, commented: “It is rare, in France, that banks and institutional investors work together in such close coordination on a real estate refinancing operation. With its innovative structure, this operation has made it possible for institutional investors to take part in the loan syndication, whereas, up until now, they have mainly been present on the debt market via bond issuances, which exclude the banking world de facto.”
The lenders were advised by Etude Rochelois (Muriel Mignard) and GGSM (Jean-Maurice Gaillard). The securitized fund was advised by Gide (Xavier de Kergommeaux). The borrower was advised by Wragge & Co (Pierre-Emmanuel Chevalier), Etude Monassier & Associates (Sylvie Burthe-Mique) and Etude Lazaygues & Associates (Didier Lasaygues).
Source: Citigate Dewe Rogerson