The AMMC has approved the long-awaited prospectus regarding the creation of a securitisation fund comprising Alliances Développement Immobilier Group assets. FT Domus is a real estate fund by definition, launched by the management company, BMCE Capital Titrisation.
The launch of this fund, which will be listed on the Exchange, must be seen in the context of the property company’s debt restructuring programme. It is worth recalling that this securitisation transaction, amounting to MAD 1,210,551,400, will help bring down the company’s overall debt from MAD 9 billion to less than MAD 2 billion.
The different phases of this debt restructuring process are known, beginning with the dations-in-payment and repurchase agreements provided by the Kingdom’s three main banks, AWB, BMCE and BP. The second phase, which was all about negotiating ADI’s debt with mutual funds, proved more challenging because fund managers cannot hold property assets on their balance sheets.
This led to a delay, both in terms of the negotiations regarding the value of the assets put forward by Alliances and the search for a new formula which would provide mutual funds with the solution to the problem of holding these assets while respecting their legal form.
The creation of the FT DOMUS securitisation fund has proved to be the solution!
Admittedly, the AMMC, while taking its time to approve the prospectus, has not only provided reassurance that this innovative solution resolves the problem of Alliances’ debt being held by mutual funds but has, in particular, helped Alami Lazraq’s property company get on with its financial restructuring programme.
This is in fact the penultimate stage of a long process which will culminate with the company issuing a new bond which will consolidate all debt not traded until now.
It is already established that this issue will not only be underwritten but will have a long maturity with a two- or three-year grace period as far as interest payments are concerned.
This will give ADI a little more breathing space to enable it to focus on its business recovery, the key being to develop new projects.
This issue is unlikely to amount to more than 2 billion dirhams with annual interest repayments amounting to not more than MAD 200 million for ADI.
Coming back to FT DOMUS, it is worth knowing that the subscribers to this property fund have already been identified.
These are the mutual funds which hold ADI debt, which they have not been able to exchange against real estate assets.
Similarly, FT DOMUS’ assets are none other than those accepted by the latter as dations-in-payment.
BMCE Capital Titrisation’s role as fund manager, assisted by property experts, will consist of valuing the real estate assets in question at fair value and finding buyers with the admirable goal of enabling ADI’s creditors, FT Domus’ unit-holders, to liquidate their commitments.
FT Domus is a new kind of financial product which is similar to collective property funds, the only difference being that its initiating shareholders are none other than Alliances Group’s former mutual fund creditors.
And therein lies the genius of Finance …
Afifa Dassouli
Further information about the Fund
FT DOMUS is a securitised umbrella fund governed by Act No. 33-06 relating to asset securitisation, as amended and complemented. The Fund, whose purpose is to acquire property assets, put forward by ADI Group as part of its corporate debt restructuring and accepted by a number of creditors, will issue securities to the said creditors listed in the Fund’s prospectus, on an exclusive basis. The said creditors will subscribe directly or indirectly via a designated subscriber with qualified investor status.
The assets acquired by the fund will be valued on a half-yearly basis in accordance with RICS professional standards and will be managed by an independent expert, which will be responsible for managing the property, tax, administrative and technical aspects of the asset portfolio.
This transaction has been set up to enable debt repayments to be made, via the securitisation fund, to participating creditors such as mutual funds, which cannot participate directly in the dations-in-payment phases due to constraints regarding their investment universe.
The anticipated subscription period is 26-28 March with 30 March set as the issue date.
Orginal article : https://lnt.ma/ft-domus-ouf-alliances/
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