Amir Dayan’s yielding real estate giant Vivion Investments S.à r.l. successfully completed issuing a new series of bonds in the amount of 1.4 billion euros at the end of August. The series, which will be repaid in 2028-2029, will replace two series of unsecured notes and the convertible bonds that were due by 2024 and 2025. Amir Dayan obtained certainty for more than five years at the price of a 6.5% interest rate.
The conversion was completed rapidly: Amir Dayan achieved financial peace for the upcoming five years. During the past few weeks, the profitable real estate company Vivion completed a huge debt recycling.
Vivion, which operates in Europe, invited the holders of the 2024 unsecured notes, the 2025 unsecured notes as well as the holders of the convertible bond to exchange any and all of their holdings for a combination of the 2028 secured notes, the 2029 secured notes and a cash payment upfront. Next year Vivion was supposed to repay 663 million euros and the year after that, it had to repay 602 million euros and 200 million euros.
The bondholders will receive the bonds of the new series, which will be repaid in 2028 for the bondholders who are to be repaid next year, and in 2029 for the bondholders who are repaid in 2025, instead of their current bonds. The series will be repaid in one payment each from these years, while the interest will be paid periodically until the maturity date in addition to a PIK interest of 1.4%-2.25%.
In fact, the holders of the bonds that were supposed to be repaid next year received 20% of the consideration in cash, and the balance will be paid to them as part of the new bonds, and the holders of the series that was supposed to be repaid in 2025 received 10% of the amount in cash and the balance through the new series.
Seemingly, Vivion will now bear higher financing expenses, however, considering the level of interest in the world in general and in Europe in particular, it is a fairly solid interest rate.
Also, Vivion has committed to maintain a Loan-to-Value ratio (LTV) that will not exceed 65%.
The refinancing, which will provide Vivion with the financial flexibility required to capitalize on attractive opportunity Vivion set eye on. Despite challenging market conditions, Vivion undertook this transaction with speed and certainty, positioning Vivion for success both in the near and longer term.
As of the end of 2022, Vivion has 839 million euros cash in its treasury, so it had the liquid means to pay the debt to the 2024 bondholders, the change in the interest rate environment, as well as the tightening of conditions in the real estate market in Germany, pushed Vivion to carry out the debt recycling. This is because yielding real estate companies are often financed in the main market, that is, they issue a new series of bonds when one of their existing series is repaid, and there is no telling what the interest rate environment could be next year and the year after. From this point of view, Amir Dayan bought five years of peace at an interest rate that is considered good under the current conditions, whereas if there will be better market conditions, Vivion has an option to repay all of the new series after one year at nominal value (non-call one option).
The deal closing was quite fast, the proposal was submitted to the bond holders at the end of July and the refinancing was carried out in just one month.
Who are Vivion Real Estate?
Vivion is a private company, and it publishes reports because its bonds are traded on the pan-European Euronext exchange. Amir Dayan is the major shareholder in the company.
As of the end of 2022, the company has 54 properties in the UK and 48 properties in Germany. The total asset value at the end of this year was 5.2 billion euros. In United Kingdom the company owns hotels that are leased, among others, to the Hilton chain, while in Germany it mainly owns office buildings.
Vivion ended 2022 with revenues of 233 million euros, an increase of about 17% compared to revenues of 199.6 million euros in 2021.
Who is Amir Dayan?
Amir Dayan is a global real estate investor; Amir is one of the beneficial owners of the real-estate company Vivion Investments S.à.r.l and the Vice Chairman of the Advisory Board. Born in Tel Aviv in 1974, Amir Dayan is an investor who works primarily in real estate across Europe and has shown a particular interest in the UK, Germany and the Netherlands. Part of the Dayan family, Amir oversees their real estate business in Europe, among other responsibilities.
Amir Dayan has been particularly invested in the European hotel industry, which includes the Africa-Israel hotel chain, as well as other real estate sectors since 2005.
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