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Aareal and Natixis arrange €525m French REIT loan

The new facility has been sourced to refinance an existing €405m loan.

French real estate investment trust (REIT) Cegereal has agreed a €525 million refinancing with a club of European banks led by Aareal and Natixis.

The new facility has been sourced to refinance an existing €405 million loan, which was due to mature in August 2017. The debt will also finance new transactions, the REIT said.

The five-year loan carries an interest rate of 1.35 percent, reflecting a debt ratio of 55 percent. Cegereal said that it has reduced its finance costs by 45 percent with the new deal.

Germany’s Aareal and France’s Natixis were mandated lead arrangers in the financing. The loan can be extended for two years after the initial term.

The €405 million senior loan which the new facility refinanced was originally provided by Aareal, BayernLB, Deutsche Pfandbriefbank and Berlin Hyp. The facility had an all-in cost of 3.4 percent if the occupancy rate of the security properties was less than 90 percent and 3.15 percent if it was above 90 percent.

“Through this major deal, we have reduced the weight of our financial expenses and now have more headroom to carry out our growth projects,” said Raphaël Tréguier, CEO of Cegereal.

Cegereal was launched in 2006 and invests in prime offices in the Greater Paris area. The firm’s portfolio was most recently valued at €1.04 billion. As at the end of 2015, Cegereal’s loan-to-value ratio was 43 percent.