Aareal Bank AG
Aareal Bank in Wiesbaden
Aareal recently agreed an €800m debt facility with funds affiliated to US investor Apollo Global Management to finance a pan-European portfolio of logistics properties. The loan is for five years, and the deal was concluded in less than three months.
Turnaround specialist Lone Star has been seeking a buyer for its commercial property finance provider Corealcredit Bank AG for some time, and it has now concluded a deal with Aareal Bank to sell its charge for a preliminary purchase price of €342m.
The Wiesbaden-based Aareal Bank said the transaction would be completed during the first half of next year, after gaining the necessary approvals from the financial authorities.
Lone Star bought over the nearly-defunct AHBR bank in 2005 after that bank had been brought to its knees by disastrous interest rate speculation. Under Lone Star’s protective wings, the bank has been gradually rehabilitated and repositioned as a specialist financier for domestic investors in commercial property. The bank actually returned to profit in 2007. The bank has total assets of €7.6bn, with commercial property financing volume of € 3.6bn.
The price Aareal Bank is paying is at a discount to Corealcredit’s book value, with Aareal saying in a statement that it was financing the deal from its own resources. The positive effect on earnings per share for Aareal will be more than € 3.00, with Aareal’s medium-term return on equity of 12% pre-tax remaining unchanged, said the statement.
Since its rehabilitation, the Frankfurt-based Corealcredit Bank has been mainly financing commercial properties with maturities of up to 10 years, financing volumes of 10m and upwards, and as a Pfandbrief-issuing bank, can normally lend up to 75% of an asset’s market value. It has 175 staff, with offices in Frankfurt, Berlin, Hamburg, Düsseldorf, Stuttgart and Munich.
