FIBRA Macquarie México Announces Signing of US$159 Million Unsecured Refinancing Program and US$258 Million Interest Rate Swap Program

Highlights

  • Signed amended and restated unsecured bank credit agreement with US$84 million of new loan commitments, upsizes credit facility to US$516 million
  • Signed US$75 million unsecured, ten-year private placement note purchase agreement
  • Intends to repay Ps.$940 million of secured loans and revolver facilities equivalent to US$62.8 million on September 30, 2016
  • Implemented US$258 million interest rate swap program

MEXICO CITY--()--FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) announced the signing of binding agreements in respect of a US$159 million unsecured refinancing program (the Refinancing). The US dollar-denominated borrowings of US$112.5 million will be used to repay FIBRA Macquarie’s asset-level Ps.$940 million (US$47.7 million) of secured loans due to mature in October 2016 and repay revolver drawings equivalent to US$62.8 million, as well as associated interest and transaction costs. The Refinancing is expected to close on September 30, 2016.

“The Refinancing will strengthen FIBRA Macquarie’s balance sheet and improve a range of key metrics including debt tenor, lender diversification and long term cost of funding.”

The Refinancing, including the associated interest rate swap program, is expected to:

  • Extend weighted average tenor of debt outstanding to 4.8 years, from 4.0 years, as of 30 September 2016;
  • Secure long-term, fixed-rate funding, with a pro forma weighted average cost of debt of 4.9 percent per annum, compared to 5.1 percent per annum as of 30 June 2016;
  • Increase the proportion of fixed-rate funding across FIBRA Macquarie’s US$907.4 million of outstanding debt to 89.2 percent;
  • Diversify financing sources to 13 different firms, including seven local and international banks, as well as six leading US insurance companies, including new commitments from existing lenders as part of the current Refinancing; and
  • Enhance FIBRA Macquarie’s liquidity, with undrawn revolving credit facility commitments of US$160 million.

The US$159 million Refinancing follows a US$685 million refinancing successfully completed on 30 June 2016, which resulted in FIBRA Macquarie transitioning to a predominately unsecured debt capital structure. With these proceeds, along with the utilization of surplus cash, FIBRA Macquarie has accelerated repayment of loans totaling approximately US$764 million.

“FIBRA Macquarie has received very strong support from existing and new lenders to complete or sign long-term financing agreements exceeding US$840 million since 30 June 2016. These agreements enable the accelerated repayment of loans and increase our undeployed capital to US$160 million in the form of undrawn revolving credit facility commitments,” said Juan Monroy, chief executive officer of FIBRA Macquarie. “The Refinancing will strengthen FIBRA Macquarie’s balance sheet and improve a range of key metrics including debt tenor, lender diversification and long term cost of funding.”

US$516 Million Credit Facility (the Credit Facility)

The existing Credit Facility was upsized to US$516 million from US$432 million (US$435 million rebased for a current exchange rate of Ps.19.72), with an increase of US$37.5 million in non-amortizing term funding and US$46.6 million in revolving credit facility funding. The Credit Facility now comprises a US$258 million, non-amortizing, term loan expiring on 30 June 2021 and a US$258 million equivalent revolving credit facility expiring on 30 June 2020. The tenors of the term loan and the revolving facility are inclusive of one-year extension options exercisable at FIBRA Macquarie’s discretion, subject to satisfaction of customary conditions. The Credit Facility is available for general corporate purposes, including acquisitions.

The upsized revolving credit facility comprises a US$177 million US dollar-denominated tranche and a Ps.1,605 million (equivalent to US$81 million) undrawn Mexican Peso-denominated tranche. FIBRA Macquarie expects to have US$98 million outstanding under the US dollar-denominated tranche at closing, resulting in an undrawn balance of approximately US$160 million.

The US$258 million term loan tranche bears interest at a variable rate of 3 Month LIBOR plus an annual margin of 3.125 percent. The US Dollar and Mexican Peso revolving tranches continue to bear interest at variable rates of 1 Month LIBOR plus an annual margin of 2.75 percent, and Mexican 28-day TIIE plus an annual margin of 2.45 percent, respectively.

Interest Rate Swap Program

FIBRA Macquarie has entered into interest rate swap agreements fixing all of the variable interest rate exposure relating to the US$258 million term loan tranche through 30 June 2020. Following entry into the interest rate swaps, the effective interest rate on the US$258 million term loan tranche of the Credit Facility will be 4.4 percent per annum. As a result of the swap program, the US$98 million drawn on the revolving credit facility will be the only variable rate funding on FIBRA Macquarie’s balance sheet at 30 September 2016.

US$75 Million Private Placement Notes (the Notes)

The Notes will be placed with two leading US insurance companies and follows the successful private placement of US$250 million of seven-year notes completed on 30 June 2016. The ten-year Notes are non-amortizing and bear interest at a fixed-rate of 5.44 percent per annum.

Please refer to the following pro-forma table summarizing FIBRA Macquarie’s loans outstanding as at 30 September 2016.

Pro-forma Debt Disclosure

 

Debt Associated with Wholly-Owned Properties

 
Lenders   Ccy  

Outstanding
Balance
US$ mm1

 

Outstanding
Balance Ps.
mm1

 

Interest Type
(Fixed/ Variable)

 

Interest Rate
p.a.

 

Amortization

 

Security Type

  Commencement Date   Maturity Date  

Extended
Maturity Date5

Various Banks through a Credit Facility - Term Loan   USD   258.0   5,088.0   Fixed2   4.375%  

Interest Only

 

Unsecured

  Jun-16   Jun-20   Jun-21
Various Banks through a Credit Facility - Revolving Credit Facility8   USD   98.0   1,932.7   Variable   30 day LIBOR+2.75%  

Interest Only

 

Unsecured

 

Jun-16

  Jun-19   Jun-20
  Ps.   -   -   Variable   TIIE 28 day+2.45%          

Various Insurance Companies through a Note Purchase and Guaranty Agreement - Term Loan

USD

250.0

4,930.3

Fixed

5.55%

Interest Only

Unsecured

Jun-16

Jun-23

-

 

USD

 

75.0

 

1,479.1

 

Fixed

 

5.44%

     

Sep-16

 

Sept-26

 

-

Metropolitan Life Insurance Company - Term Loan   USD   182.5   3,599.1   Fixed   4.50%  

Interest Only3

 

Guaranty Trust, among others4

  Dec-12   Jan-18   -
Total       863.5   17,029.2                            
 
 

Debt Associated with JV6

                                         
Lenders   Ccy  

Outstanding
Balance
US$ mm1

 

Outstanding
Balance Ps.
mm1

 

Interest Type
(Fixed/ Variable)

 

Interest Rate
p.a.

  Amortization3   Security Type4   Commencement Date   Maturity Date  

Extended Maturity
Date5

Blackstone through its subsidiary in Mexico BRE Debt Mexico II, S.A. de C.V., SOFOM E.N.R.7 - Term Loan   Ps.   29.3   577.5   Fixed   6.89%   Interest Only   Guaranty Trust, among others   Mar-14   Apr-17   -
Metropolitan Life Insurance Company -
Term Loan
  Ps.   14.6   288.0   Fixed   7.61%   Interest Only   Guaranty Trust, among others   Mar-14   Apr-19   -
Total       43.9   865.5                            

1. Excludes capitalized upfront borrowing costs which are amortized over the term of the relevant loan. FX: Ps. 19.7211 per USD 2. Fixed by a corresponding interest rate swap. Term loan has a variable interest type calculated at 90 day LIBOR+3.125% p.a. spread 3. Interest only subject to compliance with certain debt covenants 4. Lenders have recourse only to the properties, cash flows and other reserves constituted under the facilities, except under certain limited circumstances in which the lenders have recourse to FIBRA Macquarie 5. Extension at FIBRA Macquarie’s option, subject to meeting certain conditions 6. Amounts stated represents FIBRA Macquarie’s proportionate share 7. BRE Debt Mexico II, S.A. de C.V., SOFOM. E.N.R. assigned its rights as lender to Banco Mercantil del Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte, División Fiduciaria, as trustee of guaranty Trust number F/745464 8. As of September 30, 2016, the Revolving Credit Facility is expected to have available undrawn commitments of USD 78.5 million (USD tranche) and Ps.1.6 billion (Peso tranche) totaling to USDe 159.9 million. Note: All interest rates are exclusive of withholding taxes.

About FIBRA Macquarie

FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) is a real estate investment trust (fideicomiso de inversión en bienes raíces), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties. FIBRA Macquarie’s portfolio consists of 277 industrial properties and 17 retail/office properties, located in 24 cities across 19 Mexican states as of June 30, 2016. Nine of the retail/office properties are held through a 50/50 joint venture with Grupo Frisa. FIBRA Macquarie is managed by Macquarie México Real Estate Management, S.A. de C.V. which operates within the Macquarie Infrastructure and Real Assets division of Macquarie Group. For additional information about FIBRA Macquarie, please visit www.fibramacquarie.com.

Macquarie Infrastructure and Real Assets is a business within the Macquarie Asset Management division of Macquarie Group and a global alternative asset manager focused on real estate, infrastructure, agriculture and energy assets. Macquarie Infrastructure and Real Assets has significant expertise over the entire investment lifecycle, with capabilities in investment sourcing, investment management, investment realization and investor relations. Established in 1996, Macquarie Infrastructure and Real Assets has approximately US$104.6 billion of total assets under management as of March 31, 2016.

About Macquarie Group

Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. Macquarie employs approximately 14,372 people and has assets under management of more than $367 billion (as of March 31, 2016).

Cautionary Note Regarding Forward-looking Statements

This release may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ significantly from these forward-looking statements and we undertake no obligation to update any forward-looking statements.

None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

THIS RELEASE IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES, AND SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED.

THIS ANNOUNCEMENT IS NOT FOR RELEASE IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA.

All figures in this release are subject to rounding and stated in US Dollar or US Dollar-equivalent amounts, unless otherwise specified. Any arithmetic inconsistencies are due to rounding.

Contacts

Investor relations:
+52 (55) 9178-7763
fibramq@macquarie.com
or
For Macquarie Group
Evelyn Infurna, +1-203-682-8265
evelyn.infurna@icrinc.com
or
Macquarie Group
Jay Davis, +1-212-231-1825
jay.davis@macquarie.com
or
Press queries:
Macquarie Group
Melissa McNamara, +1-212-231-1667
Corporate Communications
melissa.mcnamara@macquarie.com

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