DIC Asset AG signed an agreement for a €960 million seven-year refinanced loan facility for its commercial portfolio.
The real estate company will channel funds from the refinancing toward early repayment of existing financial arrangements it holds with several banks for its commercial portfolio.
The refinancing will also provide DIC Asset with a lower interest rate of approximately 1.7% on bank loans for its commercial properties, a reduction of 170 basis points from its prior loan facilities. The company expects to fully repay old debt obligations in January 2017, with the early repayment triggering off some one-time expenses like the early termination penalty amounting to about €59 million.
Along with the new loan and its more advantageous interest rate, the company expects an estimated €40 million boost to its cashflow next year, including anticipated annual interest expense savings of up to €20 million. In addition, DIC Asset predicts its funds from operations for the 2017 financial year to be between €55 million and €60 million.
DIC Asset expanded its commercial property portfolio in Germany with several buys in recent months, including its €32 million purchase of the Office Center Plaza in Hanover, a mixed-use retail center in Halle for €59.3 million and its €220 million acquisition of a 75,000-square-meter retail portfolio in Hamburg and the Bergedorf district of Germany.
The agreement was underwritten by Deutsche Hypothekenbank AG as joint lead manager with Berlin Hyp AG and HSH Nordbank AG.