EU REAL ESTATE: Public Property Invest: Buying NOK 37bn Portfolio

(PUPRIN; NR/NR/BBB+)

Transaction details:
• NOK 37bn of assets to be valued at NOK 34bn ~8% discount to NAV as per external valuation.
• Apart from the new equity and NOK 13.5bn bridge loan, the company will use NOK 6.9bn of cash.
• Proforma LTV to rise from 35.2% to 49.0%
• NetDebt/EBITDA 8.3x to 9.0x
• ICR 2.1x to 2.7x
• WAULT falls from 7.5yr to 6.6yrs but government tenants rises from 80% to 84%. The true WAULT tends to be longer for government-backed tenants.
• Fitch has raised the rating to BBB+ as the increased overall size of the portfolio helps but the market will anticipate €1bn+ of funding needs. Some of which will probably be done via bond issuance.
• PUPRIN 3.875 31 €300m was issued in October. Screening as stable so far.