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eQ Commerical Properties Fund - Consent Solicitation (FI) - Launch

eQ Commercial Properties Fund (the "Issuer") announces today a written procedure in respect of its EUR 130,000,000 senior secured fixed rate notes (ISIN: FI4000387782) (the "Notes")

29 NOVEMBER 2023


Full announcements, including disclaimers and restrictions available via eQ Commercial Properties Fund


"The Issuer intends to extend the maturity of the Notes and of the Issuer's senior EUR 133 million bank term loan to enable the Issuer to pursue the execution of its strategic plan for 2024. In connection with the proposed extension of the final maturity date of the Notes from 29 January 2024 to 31 December 2024, the Issuer would make an extraordinary amortisation in an amount equal to EUR 63,180,000 of the nominal amount of the Notes together with any accrued but unpaid interest up to (but excluding) the date of the extraordinary amortisation (the "Agreed Extraordinary Amortisation"). The remaining nominal amount of the Notes after the Agreed Extraordinary Amortisation would be EUR 66,820,000. The Agreed Extraordinary Amortisation would be paid to Noteholders within 10 business days from the date on which the amended terms and conditions of the Notes have been duly executed and become effective and binding. The fixed interest payable on the remaining nominal amount would be increased to 8.250% p.a. (up from 2.750% p.a.) from (and including) the date the Issuer made such Agreed Extraordinary Amortisation.


The Issuer is therefore initiating the written procedure (the "Written Procedure") in accordance with Clause 18 (Written Procedure) of the terms and conditions (the "Terms and Conditions") of the Notes that are currently in force. The Written Procedure is initiated in respect of the Notes to request Noteholders' consent for related amendments of the Terms and Conditions of the Notes and related amendments to the Intercreditor Agreement, as further specified in the notice of the Written Procedure (the "Notice of Written Procedure") which is attached to this press release. The Noteholders are advised to carefully read the Notice of Written Procedure for full details on the request and the procedures for participating in the Written Procedure. All capitalised terms used herein and not otherwise defined in this release shall have the meanings assigned to them in the Terms and Conditions.


The Issuer has mandated Nordea Bank as solicitation agent (the "Solicitation Agent") in the Written Procedure. Nordic Trustee acts as the Noteholders' Agent and also as the tabulation agent in the Written Procedure.


Prior to the announcement of the Written Procedure, discussions have been held with certain larger institutional Noteholders which represent 66.3 per cent. of the Adjusted Nominal Amount of the Notes (as defined in the Terms and Conditions of the Notes) and which have expressed support for the request. For the request to be approved by the Noteholders, at least 66⅔ per cent. of the Adjusted Nominal Amount for which Noteholders reply in the Written Procedure need to vote in favour of the request.


This press release is published in compliance with Clause 23.2.1 of the Terms and Conditions of the Notes and shall be deemed to have been received by the Noteholders when published. This press release is published in addition to the communication to the CSD and each person who is registered as a Noteholder at the Record Time (being 28 November 2023) prior to this date on which the communication is sent in accordance with Clause 18.1 of the Terms and Conditions of the Notes.


Fees


Early Voting Fee: Subject to the request being duly approved and the Issuer not withdrawing the request or the Written Procedure, the Issuer is offering Noteholders an early voting fee of 0.25 per cent., equal to EUR 250.00 for each EUR 100,000 in nominal amount of the Notes for which a valid voting instruction for or against the request has been submitted to the Noteholders' Agent prior to 1 p.m. (Finnish time) on 8 December 2023 ("Early Voting Deadline").


Base Fee: Subject to the request being duly approved and the Issuer not withdrawing the request or the Written Procedure, the Issuer shall pay each Noteholder a base fee of 1.50 per cent., equal to EUR 1,500.00 for each EUR 100,000 in nominal amount of the Notes.


For the avoidance of doubt there will be a total fee of 1.75 per cent. payable to Noteholders that submit a valid voting instruction for or against the request prior to the Early Voting Deadline."


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"BACKGROUND


The Issuer intends to extend the maturity of the Notes and of the Issuer's senior EUR 133 million bank term loan (the "Term Loan") to enable the Issuer to pursue the execution of its strategic plan for 2024. In connection with the proposed extension of the final maturity date of the Notes from 29 January 2024 to 31 December 2024, the Issuer would make an extraordinary amortisation in an amount equal to EUR 63,180,000 of the nominal amount of the Notes together with any accrued but unpaid interest up to (but excluding) the date of the extraordinary amortisation (the "Agreed Extraordinary Amortisation"). The remaining nominal amount of the Notes after the Agreed Extraordinary Amortisation would be EUR 66,820,000. The Agreed Extraordinary Amortisation would be paid to Noteholders on a CSD Business Day that is within ten (10) Business Days from the Effective Date and the fixed interest payable on the remaining nominal amount would be increased to 8.250% p.a. (up from 2.75% p.a.) from (and including) the date the Issuer made such Agreed Extraordinary Amortisation.


The Issuer initiates the Written Procedure to seek approval for the amendments to the Terms and Conditions to facilitate, among other things, the extension of the maturity date and the Agreed Extraordinary Amortisation of the Notes. Separately, the extension of the Term Loan from 22 December 2023 to 31 December 2024 would be carried out under the Issuer's senior committed facilities of EUR 463,250,000 by entering into an amendment and restatement agreement (the "Amendment and Restatement Agreement") of the senior facilities agreement (the senior facilities agreement as amended by the Amendment and Restatement Agreement, the "Senior Facilities Agreement"). In connection with the Amendment and Restatement Agreement it is necessary to make certain amendments also to the intercreditor agreement initially entered into on 24 June 2019 and as amended and restated on 5 July 2021 between, among others, the Issuer, certain property companies as obligors, Intertrust (Finland) Oy as security agent, Nordea Bank Abp as bank agent, certain financial institutions as bank lenders and the Noteholders’ Agent (the "Original Intercreditor Agreement" and, as amended, the "Intercreditor Agreement"). Changes to the Original Intercreditor Agreement are needed to allow a new financial institution, Norion Bank AB, to accede as a lender to the agreement. The acceding lender is intended to provide most of the financing needed for the Agreed Extraordinary Amortisation to be paid to Noteholders. Norion Bank AB is intended to provide EUR 60,000,000 of new secured financing under a separate financing arrangement (the "Norion Finance Documents").


The Issuer is therefore initiating the Written Procedure in respect of the Notes in order to enter into the Amendment and Restatement Agreement and the Norion Finance Documents, and to amend the Terms and Conditions and the Original Intercreditor Agreement, as further set out in this Notice."


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