Aroundtown - Grand City Properties- comment

Both Companies are launching an exchange offer with potential for 15% redemption.  

Grand City Properties is launching a tender for 2 of its 3 Perpetuals (the 3rd isn’t callable until Jun 2026), offering new perpetual with 6.125% coupon with 6yrs to first reset.  

AroundTown is launching a tender for 4 of its 5 Perpetuals (the 5th isn’t callable until July 2026), offering broadly the same terms as at GCP.  AroundTown also have one Sterling and one US dollar Perpetuals outstanding but are not launching a tender for those either.  

Broadly, the terms are new perpetual bonds of c. 5-6yrs to first reset, with coupon of c. 5-7.125% coupon depending on the coupon level of the Perpetuals tendered.  We await the actual tender document to ascertain the level of cash, but there appears to be an option to partial redeem 15% for cash.  The new Perpetuals are expected to have BBB- ratings and are subject to minimum tender levels of c. 22% at AroundTown and 27% at GCP.

We await the full details of the tender but this should be broadly positive for both unsecured and perpetual bonds in both entities.