Business Context and Reporting Period
Company: CB Richard Ellis Group, Inc. (CBRE)
Filing Type: Form 8-K (Current Report)
Date: February 17, 2011
Item: 7.01 Regulation FD Disclosure
This filing discloses the Company's initiation of a process to secure new debt financing to fund the acquisition of the majority of the real estate investment management business of Netherlands-based ING Group N.V. and certain related co-investments.
Key Financial Metrics and Debt Structure
The filing details proposed new debt facilities rather than historical financial performance metrics. Key proposed figures include:
- New Tranche C Facility: Up to $500 million in delayed draw, seven-year senior secured term loans.
- New Tranche D Facility: Up to $300 million in delayed draw, eight (or more) year senior secured term loans.
- Incremental Facility: The Company seeks to maintain the availability of the existing incremental facility under the Credit Agreement at $800 million.
- Use of Proceeds: Financing the ING Group N.V. acquisition.
Note: The filing text does not provide clear values for revenue, profit, cash flow, margins, or current liquidity positions.
Material Changes and Proposed Amendments
The Company is seeking an amendment to its Credit Agreement dated November 10, 2010. The proposed amendments include:
- Permitting additional wholly-owned subsidiaries to act as borrowers for the New Term Loans.
- Adding an exception to the investment covenant specifically relating to the ING acquisition.
- Maintaining the $800 million incremental facility availability.
- Providing other ancillary amendments related to the transaction.
Outlook, Risks, and Management Commentary
Status of Terms: The terms of the New Term Loans and the proposed Credit Agreement amendment are preliminary. They are subject to review and approval by the requisite lenders and the Company, and are subject to further revision.
Legal Disclaimer: The information in this report is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and is not subject to the liabilities of that section, nor is it incorporated by reference in other filings except as expressly set forth.
Investor Verification Checklist
- Confirm the final approval status of the $800 million in New Term Loans (Tranche C and D) by lenders.
- Verify the execution of the Credit Agreement amendment regarding the investment covenant exception for the ING acquisition.
- Monitor for the final closing of the acquisition of ING Group N.V.'s real estate investment management business.
- Review subsequent filings for any revisions to the preliminary loan terms or interest rates.