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NBG Pangaea refis €237.5m Pangaea Funding with €400m five-year unsecured corporate bond

By James Wallace - Tuesday, May 15, 2018 13:44

NBG Pangaea, Greece’s largest real estate investment company with a €1.6bn portfolio, is refinancing the maturing €237.5m Pangaea Funding 1 commercial mortgage-backed floating rate with a €400m five-year unsecured corporate bond, Pangea UK plc.

Initial pricing talk for the Pangea UK €400m corporate bond is high 3% to 4%. The net proceeds will refinance Pangaea Funding 1, which carried a coupon of 3.95% over Euribor and a €50m Alpha Bank loan.

The remaining funds are earmarked for new real estate investments in Greece and neighbouring markets, almost 17% of NBG Pangaea’s portfolio is in Italy, Romania and Cyprus, including 14 properties across Italy valued at €236m.

NBG Pangaea, whose portfolio is predominantly primarily office and high street retail and supermarkets assets, recently announced a target to invest around €500m over the next three years. Target sectors are thought to include city hotels, a sector it has already expanded into, student housing sector and warehouses throughout its favoured markets.

Citigroup, Credit Suisse and the National Bank of Greece are the joint bookrunners on the new corporate bond. The investor roadshow runs until Friday. The bonds, which mature in 2023, will be listed on the alternative market of Athens.

Pangaea Funding 1, structured by Cairn Capital,  is a 77-strong portfolio of predominantly National Bank of Greece (NBG) bank branches throughout the country, valued at €476.36m at the time of the 2014 transaction.

The buyer of the €237.5m notes in Pangaea Funding 1 was believed to be PIMCO, CoStar News reported at the time.

The transition to an unsecured corporate bond will provide NBG Pangaea with greater flexibility with the potential transactions of its underlying property portfolio, as well as locking in favourable terms at a time when demand for new credit among global investors is once again strengthening.

NBG Pangaea was established in 2010 as the real estate vehicle of the National Bank of Greece. In 2013, Invel acquired a 66% stake in NBG Pangaea from NBG for €653m, financed with a corporate €420m vendor finance package with a maturity longer than 10 years.

Invel syndicated the majority of its near €235m equity stake to York Capital Management which acquired €125m. The balance was acquired by a trust representing a Middle Eastern family office and Invel senior management. Post the reverse merger, Invel and its equity syndicate partners own 65%, the National Bank of Greece owns 33% and there is a 2% free float.

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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