Following a public tender, launched in January 2015, La Banque Postale (legal representative and joint-lead arranger) and pbb Deutsche Pfandbriefbank (joint-lead arranger) were selected to fund the Tour Séquoia office building located in La Défense (Hauts-de-Seine) via a finance lease (“crédit-bail immobilier”). The transaction was signed with France Domaine on 30th June 2015.
Tour Séquoia is an office building totaling approx. 53,600 m² over 33 floors. Built in 1990, was recently renovated to accommodate the employees of the Ministry of Ecology, Sustainable Development and Energy and the Ministry of Housing, Territories Equality and Rural Affairs.
The €480 mln financing, equally funded by both banks, will enable the Ministries to pay a market rent, over the term of the contract, and to acquire the building at the end of the lease period by paying a nominal sum of one Euro.
The finance lease is a legal tool which is becoming increasingly relevant for public entities as part of their real estate strategy, notably when seeking to enhance the value of their real estate portfolio. While offering a flexibility equivalent to the enjoyment of an owner and total control of the project, the finance lease also allows public entities to keep their own funds for other purposes. Furthermore, rents offer economies as public entities benefit from a purchase agreement fixed at closing without additional payment.
Jean Christophe, Head of Public Investment Finance and General Manager of the French branch of pbb Deutsche Pfandbriefbank commented: “This is the first finance lease transaction in France for pbb. It demonstrates our capacity to build on synergies between our two business segments real estate finance and public investment finance, as well as the capacity to meet public sector requirements.”
Serge Bayard, Directeur des Entreprises et du Développement des Territoires of La Banque Postale, commented: “After Garance and Millénaire III, this third finance-lease transaction with the State demonstrates the confidence it places in our teams, and recognizes our knowledge in this type of transaction.”
In this transaction, the State was advised by the law firm Seban, by Finance Consult and Etude Allez et Associés, La Banque Postale and pbb Deutsche Pfandbriefbank by Etude Rochelois-Besins & Associés.
Source: pbb Deutsche Pfandbriefbank
