On May 27, 2020, CEE Legal Matters reported that Dentons had advised CPI Property Group on a successful tender offer of bonds and the issue of EUR 750 million 2.75% notes due 2026 under CPI's EUR 8 billion Medium Term Note Program. We spoke with Martin Matula, General Counsel at CPI, to learn more.
CEELM: Can you tell our readers a few words about the CPI Property Group?
Martin: CPI Property Group is the leading long-term owner of income-generating real estate in the Czech Republic, Berlin, and the CEE region, with a total property portfolio of EUR 9.8 billion. Since 2017, we have been very active in debt capital markets and have issued bonds in seven currencies. We are regional pioneers on the DCM markets: We were the first European real estate company to complete a public bond offering in Japan, the first non-financial issuer on the TOKYO PRO BOND market, and the first foreign real estate company to obtain a credit rating from Japan Credit Rating Agency. We were the first European corporate issuer to complete a hybrid bond transaction in Singapore Dollars, and we were also the first company from our region to issue a GBP-denominated green bond. With the increasing importance of corporate social responsibility and environmental matters, we shifted our focus to green bonds. We have become the number one green bond issuer in our region and industry, a fact of which we are really proud.
CEELM: You recently concluded a successful tender offer of bonds and an issuance of EUR 750 million 2.75% notes. What was the rationale behind the refinancing/restructuring of your current capital structure?
Martin: We pay close attention to our financial policy and capital structure. The rationale of this operation was to flatten debt maturities, reduce gross leverage, and fortify our robust operating position. Needless to say, the new bond issuance was also green. In other words, we issued green bonds maturing in 2026 while we repurchased conventional bonds maturing in 2022, 2023, and 2024.
CEELM: What would you say was the most challenging aspect between the tender offer and the issuance?
Martin: These processes were linked, and the tender offer completion was subject to the successful completion of the new green bond issue. The two trades ran in parallel, we needed to coordinate between dealers’ groups and monitor market announcements. In the end, the transaction was very successful, and another example of our market-leading efforts in the DCM.
CEELM: What was Dentons’ mandate specifically?
Martin: Dentons acted as issuer’s counsel with a standard mandate. They helped us to update our EMTN program from EUR 5 billion to EUR 8 billion in the first place and then provided complex legal support during the actual deals.
CEELM: Why did you retain Dentons as advisers on this matter?
Martin: We have been working with Dentons on our DCM transactions for about 18 months. They have a very efficient DCM team, led by Nick Hayday in London. In the CEE region, we worked with Dentons on many real estate transactions and were always provided exceptional service. Dealers were advised by Allen & Overy, and we also appreciate their role as the counter-party’s counsel.
This is the second time Matula has been interviewed for CEE Legal Matters' Deal 5 feature, following his April 12, 2017, conversation about a CEE retail portfolio acquisition from CBRE Global Investors.