Milbank Advises Ad Hoc Committee of Noteholders on Restructuring of Corestate

Milbank LLP has advised the ad hoc committee of holders of €200 million convertible notes and €300 million senior unsecured notes on the financial restructuring of Corestate Capital Holding S.A. The restructuring transaction comprises a debt-to-equity swap, the maturity extension and collateralisation of the existing notes and the issuance of new super senior notes.

Corestate is an investment manager and co-investor with approximately €19 billion in assets under management in its core business. The company acts as a manager for the entire real estate value chain. Due to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale social trends such as urbanisation, demographic shifts or sustainability. Corestate is listed on the Frankfurt Stock Exchange and operates in 11 countries across Europe, with offices in Frankfurt, Munich, Vienna, Zurich, Paris and Madrid.

The restructuring will result in a significant deleveraging of Corestate’s debt and consequently to a sustainable capital structure. As part of this recapitalization, noteholders will be entitled to take over most of the equity in Corestate. The debt-to-equity swap will be implemented by way of an increase of Corestate’s authorized capital which is to be approved by Corestate’s general meeting. The adjustment of the existing notes will be implemented by way of consent solicitations under the German Bond Act (Schuldverschreibungsgesetz). In addition, Corestate will issue new super senior notes to receive fresh money, parts of which will be made available prior to closing of the restructuring in the form of a bridge financing.

As a first step, noteholder meetings held on 28 November 2022 adopted the resolutions proposed by the ad hoc committee which, amongst other things, provide for an extension of the maturity of the €200m convertible notes until April 2023 to enable the implementation of the transaction. Following these noteholder meetings, Corestate entered into lock-up agreements with the ad hoc committee and certain shareholders. The consummation of the transaction is subject to the usual regulatory approvals and conditions precedent.

The Milbank team that advised the ad hoc committee comprehensively on the restructuring, financing, corporate and tax aspects of the transaction was led by partner Mathias Eisen (Financial Restructuring, Frankfurt) and included partners Yushan Ng (Financial Restructuring, London), Thomas Kleinheisterkamp (Tax), Barbara Mayer-Trautmann (Finance), special counsels Nico Feuerstein (Capital Markets), Jennifer Seipelt (Finance, all Munich) and associates Robert Kastl (Financial Restructuring, Frankfurt), J. Melchior Raiser (Munich), Lara Milione (both Finance), Alexander Theisen (Financial Restructuring, both Frankfurt), Elisabeth Wöhrle (Tax, Munich), Isabel Langlois, Roza Vanian (both Financial Restructuring, London), Mira Zimmermann (Capital Markets, Frankfurt) as well as transaction lawyer Silvia Lengauer (Finance, Munich).