Aroundtown starts exchange, tender offers for two subordinated notes

By Marisa Wong

Los Angeles, April 22 – Aroundtown SA launched invitations to holders of two series of subordinated notes to either (i) exchange any and all of their existing notes for new notes and cash or (ii) exchange a portion of the existing notes and tender the remainder for purchase, according to a notice on Tuesday.

Specifically, Aroundtown is inviting holders of its £400 million outstanding undated subordinated notes with a first reset date of June 25, 2024 (ISIN: XS2017788592), currently bearing interest at 4.75%, and $700 million outstanding undated subordinated notes with a first reset date of July 21, 2023 (ISIN: XS1634523754) issued by AT Securities BV and guaranteed by Aroundtown, of which $58.5 million is held in treasury, with a current coupon of 7.747% and next reset date of July 21, 2028, to either:

• Offer to exchange any and all of the sterling or dollar notes for (a) newly issued sterling- or dollar-denominated, as applicable, undated subordinated notes subject to interest rate reset with a first call date in 2029, issued by Aroundtown Finance Sarl and unconditionally and irrevocably guaranteed on a subordinated basis by Aroundtown and (b) a cash amount; or

• Offer to exchange 80% in aggregate nominal amount of any and all of the existing sterling or dollar notes in the exchange offer and tender 20% in aggregate nominal amount of any and all of the sterling or dollar notes for purchase for cash.

Consideration

The exchange consideration for the sterling notes consists of a principal amount of new notes equal to 100% of the aggregate nominal amount of sterling notes accepted for exchange and a cash amount equal to 4% of the aggregate nominal amount of sterling notes accepted for exchange.

The tender consideration for the sterling notes is an amount in cash equal to 68.2% of the aggregate nominal amount of sterling notes accepted for exchange.

The exchange consideration for the dollar notes consists of a principal amount of new notes equal to 100% of the aggregate nominal amount of dollar notes accepted for exchange and a cash amount equal to 3% of the aggregate nominal amount of dollar notes accepted for exchange.

The tender consideration for the dollar notes is an amount in cash equal to 67.5% of the aggregate nominal amount of dollar notes accepted for exchange.

New notes

The new sterling-denominated perpetual notes offered in exchange for the sterling notes will have an initial coupon of 8.625% and a first call date on May 7, 2029. The interest rate will reset to the applicable U.K. government security benchmark plus a margin of 449.3 basis points on Aug. 7, 2029, 474.3 bps on Aug. 7, 2034 and 549.3 bps on Aug. 7, 2049.

The new dollar-denominated perpetual notes offered in exchange for the dollar notes will have an initial coupon of 7.875% and a first call date on Aug. 7, 2029. The interest rate will reset to the applicable U.S. Treasury benchmark plus a margin of 316.3 bps on Nov. 7, 2029, 341.3 bps on Nov. 7, 2034 and 416.3 bps on Nov. 7, 2049.

Each of the two new hybrid notes is subject to a minimum issue size, at least £150 million for the sterling notes and at least $150 million for the dollar notes.

Details

The offers expire at 11 a.m. ET on April 30.

Settlement is slated for May 7.

The dealer managers for the offers are BNP Paribas (+33 1 55 77 78 94; liability.management@bnpparibas.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969; liabilitymanagement.europe@citi.com).

Kroll Issuer Services Ltd. (+44 20 7704 0880; aroundtown@is.kroll.com; https://deals.is.kroll.com/aroundtown; attn.: Owen Morris) is the exchange agent.

The issuer is a Luxembourg-based commercial real estate company.

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