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Dentons and CMS Advise on AFI Palace Cotroceni Refinancing

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The Israeli AFI Europe Group has signed a EUR 220 million financing agreement with a consortium of banks for the refinancing of the AFI Palace Cotroceni commercial center in Bucharest. 

AFI was advised by Dentons, while the consortium of banks, consisting of Deutsche Pfanbriefbank, Erste Group Bank and Raiffeisen Bank, was advised by CMS Cameron McKenna. 

David Hay, Executive Director of AFI Europe Romania, commented: “We appreciate the trust offered to AFI Europe and AFI Palace Cotroceni through such an important credit line of EUR 220 million. The process was a real challenge, in light of the value of the transaction, the fact that it involved three large banks, and because of the fact that the destination of the project was in Romania. However, as this success shows, it is possible to attract large funds towards Romania for a good project and an experienced developer.”

At the end of 2007, AFI Europe took a EUR 234 million loan from Hypo Real Estate for the development of the AFI Palace Cotroceni project. On May 25, 2014, the credit was due but AFI Europe was granted an extension of two months. The Israeli owners turned to the bank consortium to refinance the project, consortium which included the Hypo Group. The latter was taken over by the German State in the interim and became Deutsche Pfanbriefbank. The contract was signed for a 5-year period. 

AFI Palace Cotroceni was inaugurated in November 2009 following a EUR 300 million investment. The total rentable surface of the mall is 81,000 square meters generating a operational revenue for the first quarter of 2014 of EUR 7.3 million (a 6.7% increase relative to Q1 in 2013). Total revenues for 2014 are expected to exceed EUR 29 million. At the moment AFI Palace Cotroceni is valued at EUR 375 million. 

AFI Europe has been operating in Romania since 2005. AFI Palace Cotroceni was its first project in the market. The company also holds AFI Palace Ploiesti and the AFI Park office complex as well as other retail real estate in Bucharest and Arad. 

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Editorial Note: In a June 24 press release, Dentons announced that the team was led by Partner Oren Harpaz, who works from the Dentons’ Frankfurt and Warsaw offices, Prague-based Counsel Gary Maguire, and Frankfurt and Warsaw-based Counsel Nir Assido.

 

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