AroundTown/GCP - comment

AroundTown announced the successful results of their exchange/tender offer for four of their Perpetual Notes and two of Grand City Properties Perpetual Notes.   74% or €1.8bn nominal bonds were successfully tendered into the offer, resulting in the Company issuing c. €1.6bn of new Perpetual Notes and repurchasing €136m nominal via the tender.  

This is a major success for the Company, with the new Perpetual Notes retaining 50% equity content under S&P methodology.  The non-tendered bonds, which range in size of €50-#200m are now effectively orphaned assets, that are likely to remain current but no prospects of being called.  For clarity, these bonds will not retain any equity weighing post their call dates.  

We continue to hold the view that Heimstaden should do something similar with their perpetuals.