8-KRegulation FD

CBRE GROUP, INC. 8-K Report, Regulation FD Disclosure (Feb 17, 2011)

Filed February 17, 2011For Securities:CBRE

Summary

CB Richard Ellis Group, Inc. (CBRE) announced on February 17, 2011, that it is seeking to secure up to $800 million in new debt financing to fund its previously announced acquisition of the majority of ING Group N.V.'s real estate investment management business and related co-investments. This financing is planned to be raised through two new term loan facilities: a Tranche C Facility for up to $500 million and a Tranche D Facility for up to $300 million. In conjunction with this potential debt issuance, CBRE is also seeking an amendment to its existing Credit Agreement. The proposed amendment would allow additional subsidiaries to borrow under the new facilities, create an exception to an investment covenant for the acquisition, and maintain the availability of the incremental facility. Investors should note that the terms of these new loans and the proposed amendment are preliminary and subject to lender and company approval.

Key Highlights

  • 1CBRE is seeking to raise up to $800 million in new debt financing.
  • 2The financing will be used to fund the acquisition of the real estate investment management business of ING Group N.V.
  • 3The new debt will be structured as delayed draw senior secured term loans under two new facilities: Tranche C ($500 million) and Tranche D ($300 million).
  • 4The company is also seeking an amendment to its existing Credit Agreement.
  • 5Key amendments include allowing additional subsidiaries to borrow, adding an exception for the ING acquisition, and maintaining the incremental facility availability.
  • 6The terms of the new loans and the amendment are preliminary and subject to lender and company approval.

Frequently Asked Questions

This Form 8-K filing discloses that CB Richard Ellis Group, Inc. is in the process of seeking commitments for new debt financing totaling up to $800 million. This financing is intended to fund the company's recently announced acquisition of the majority of the real estate investment management business from ING Group N.V.

CBRE is seeking to raise up to $500 million under a new Tranche C Facility and up to $300 million under a new Tranche D Facility, for a total of $800 million. These would be delayed draw, senior secured term loans with terms of seven years for Tranche C and eight years or more for Tranche D. However, these terms are preliminary and subject to change and approval.

CBRE is seeking several amendments to its Credit Agreement, including permitting additional wholly-owned subsidiaries to act as borrowers for the new term loans, creating an exception to the investment covenant specifically for the ING acquisition, and ensuring the availability of the incremental facility remains at $800 million. Other ancillary amendments may also be included.

No, the terms of the New Term Loans and the proposed amendment are preliminary. They are subject to review and approval by the requisite lenders, as well as by CBRE itself, and therefore are subject to further revision.