Colonia Real Estate: Successfully refinancing northern German real estate portfolio

(PresseBox) ( Köln, )
- US Bank waives mortgage of 8.4 million Euros
- State owned development bank agrees on additional object binding credit line of 8.0 million Euros

Colonia Real Estate AG (ISIN DE0006338007) finalizes debt restructuring of their real estate portfolio in Schleswig-Holstein with c. 1,600 residential units after negotiations with the involved banks. Corresponding, new contracts with a total volume of 34 million Euros have been signed by the parties and led to a significant debt reduction of the subsidiary CRE Wohnen Immobilien GmbH & Co.KG.

On the back of the new loans by the state owned development bank the CRE subsidiary signed a transfer agreement with an US bank, which waived a total of 8.4 million Euros of the outstanding debt for a profit participation warrant and an additional 3.5 million Euros in potential pre-payment penalties. On top of the release payment the CRE subsidiary received an additional credit line by the state owned development bank of up to 8.0 million Euros. The interest rate for the entire refinancing is fixed at c. 5 percent p.a. for the next 10 years. The development bank, which already financed the energetic modernization of the residential units, is now the sole bank financing this portfolio.

The positive impact of the debt waiver will be affective already in first quarter of 2009, improving the balance sheet and debt structure of Colonia Real Estate. The additional credit of 8.0 million Euros will be used to refurbish the apartments in Schleswig-Holstein during the next years thus being fully beneficial to the tenants. Colonia Real Estate expects an accelerated reduction of the current vacancy in the northern German properties and an increased valuation.

Descriptive Part: About Colonia Real Estate AG

"In completing the refinancing of our northern German residential portfolio we made another step in successfully restructuring our debt structure and improving recurring cash flow. Despite the fact, that we have no significant refinancing due until the end of 2011 we use the current market environment to continuously improve our loan portfolio and deleverage our balance sheet", stated Stephan Rind, CEO of Colonia Real Estate AG, shortly after the signing of the contracts. With around 20,000 residential units and total assets of approx. 900 million Euros, Colonia Real Estate is Germany's third largest publicly traded residential property company. The asset management of the CRE Group is responsible for more than 1.6 billion Euros real estate assets under management for third parties.
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