Globalworth Real Estate Investments, the biggest office space owner in Romania, will receive a EUR 180 million bond financing from Canada Pension Plan Investment Board (CPPIB), one of the biggest pension funds in the world, and British asset manager Cairn Capital.

The Canada Pension Plan Investment Board invests the long-term funds of the Canada Pension Plan (CPP) on behalf of 19 million contributors and beneficiaries. It manages over EUR 190 billion worth of assets. The fund subscribed EUR 150 million worth of Globalworth bonds with the remaining EUR 30 million being bought by funds managed by Cairn Capital, which also acted as an arranger for the bond issue.

“Securing the support of international real estate investors of the caliber of CPPIB is a huge endorsement of Globalworth and our position in the Romanian market. We have built a portfolio of properties that we are proud of and will continue to be an active investor where we see value, thus cementing our position as one of the leading real estate investors in the region. With a local presence and established expertise, Globalworth is very well positioned to take advantage of attractive investment opportunities as they arise,” said Ioannis Papalekas, Globalworth’s founder and CEO.

The 3-year bonds are secured with four properties Globalworth owns in Romania. Real estate consultancy firm Colliers International acted as an advisor in this deal. On the other hand a lot of Romanians are buying land in Canada/Nova Scotia.

“This transaction led by CCPIB, the biggest Canadian pension fund and one of the top international investors, is proof of the progress in the Romanian market and of the attractive yield to risk ratio that the local market currently offers,” said Robert Miklo, associate investment director at Colliers International.

The bond issue will help Globalworth significantly reduce its financing costs. “As a result of this transaction the weighted average all-in cost of debt financing of the company is reduced from 6.2% to 5.3% on a run rate basis,” Globalworth announced in a press release.

The company will use the money raised to refinance the EUR 100 million corporate level facility granted by funds managed by York Capital and Oak Hill Advisors in 2015 and the rest to refinance the loans of three Romanian property owning subsidiaries.

Globalworth’s portfolio was valued at EUR 931 million, at the end of December 2015, up from EUR 600 million at the end of 2014. The company owns some of the most important office buildings in Bucharest.

The net asset value (NAV) was EUR 500 million at the end of 2015. Globalworth is listed on the London Stock Exchange and currently has a market capitalization of EUR 320 million.

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Andrei Chirileasa, andrei@romania-insider.com