Series I Notes Exchange
Offer presentation
October 2020
ARGENTINA
CENTRAL BANK
RESOLUTION
"A" 7106
- Central Bank (BCRA) Communication "A" 7106 restricts access to the Foreign Exchange Market to obtain US dollars for the payment of debt maturities.
- Companies with capital maturities between 10.15.2020 and 03.31.2021 had to submit to the BCRA a detail of a refinancing plan based on the following criteria:
- that the net amount for which the exchange market will be accessed in the original terms will not exceed 40% of the capital amount due in the period.
- that the rest of the capital be refinanced with a new issuance with an average life of 2 years.
- IRSA's Series I, for an amount of USD 181.5 million, falls within the period contemplated by the provision, given its maturity on 11.15.2020.
2
IRSA's SERIES I EXCHANGE - USD 181.5mm - 10% - Nov 20
OPTION A
- at least USD 0.50 in cash and the rest with a new issuance (SERIES VIII)
For each USD 1
presented in exchange,
you will receive the accrued interest until
settlement date and…
OPTION B
…Early bird (until 10/30/20) 2% in ARS and a new
issuance (SERIES IX)
SERIES VIII | CLASE IX |
US Dollars
100% Nominal Value
10% fixed - Quarterly payments
Three equal installments, 36 months
In kind, in exchange of existing SERIES I
CURRENCY & PRICE OF ISSUANCE
INTEREST RATE
AMORTIZATION & MATURITY
SUSCRIPTION
US Dollars
100% Nominal Value
10% fixed - Quarterly payments
Bullet at maturity (3/1/23), ~27 months
In kind, in exchange of existing SERIES I and/or in cash, in US Dollars
USD 108.9 million | SERIES MAXIMUM SIZE | USD 108.9 million (up to USD 181.5 million) |
Buenos Aires | PAYMENT LOCATION | New York |
The Exchange of the Notes implies consent to the Essential Modifications and/or the Non-Essential Modifications
3
IRSA's SERIES I EXCHANGE - USD 181.5mm - 10% - Nov 20
SCENARIOS*
OPTION A
80% | USD 72.6 | USD 72.6 | USD 36.3 | ||
SERIES VIII | 50% | Cash | 50% | 01 SERIES IX | |
OPTION B
Base scenario according to the SERIES IX
subscription notifications received from some 20% bondholders.
50% | USD 18.2 | USD 72.6 | 02 | USD 90.8 | 50% | ||
30% | |||||||
SERIES VIII | 20% | Cash | 80% | SERIES IX | |||
40% | USD 72.6 | 03 | USD 108.9 | 60% |
Cash | SERIES IX | |||
* It is assumed that SERIES IX it is integrated only with exchange, without new subscribers.
4
IRSA's SERIES I EXCHANGE - USD 181.5mm - 10% - Nov 20
ADDITIONAL INFORMATION
Early Bird Series IX | Cash | Exchange closure | Settlement | |||
2% ARS | ||||||
suscription* | ||||||
Oct 30, 2020 | Nov 5, 2020 | ~ Nov 11, 2020 | ||||
8 PM BA time | 8 PM BA time |
* Public auction date wil be infomed in a supplementary notice during the Exchange period.
RATING | EXCHANGE AGENT | |
A (arg)
JOINT-BOOK RUNNERS
5
The Company
IRSA
R E A L E S TAT E L E A D E R I N A R G E N T I N A
- 30 years acquiring, developing and operating real estate in Argentina.
- 25 years listed on the NYSE and accessing capital markets.
- Management with proven track record in the industry.
- Real Estate in Argentina as a value haven - assets denominated in US dollars.
RENTAL PROPERTIES
- Controlling shareholder of IRCP (BYMA:IRCP ; NASDAQ:IRCP), leader in Shopping Centers and Offices in the country.
- Owner of 3 premium hotels in Argentina and investment in CONDOR, US hotel REIT.
(BYMA:CRES ; NASDAQ:CRESY)
62.4%
(BYMA:IRSA ; NYSE:IRS)
DEVELOPMENT PROPERTIES
- ~20 mm sqm premium landbank for future developments, almost to double current rental portfolio.
- Owner of Santa María del Plata - 700th premium sqm in Puerto Madero (BA).
- Investment in Banco Hipotecario - future singergies with the develompent of mortage market in the country.
80.7% | HOTELS | LANDBANK | 29.9% | 18.9% |
(BYMA:IRCP ; NASDAQ:IRCP) | 7 |
SHOPPING MALLS' | ATOMIZED AND DIVERSE TENANT MIX | ||||
UNIQUE PORTFOLIO | With low incidence of department stores | ||||
TOP FIVE ON SALES | SALES BY TYPE | ||||
6.7% | 17.3% | Others | |||
19,5% | |||||
Department Store | |||||
5,4% | |||||
93.3% | 82.7% | 10,8% | 56,2% | ||
Restaurants | |||||
8,1% | |||||
BY BASE RENT | BY SQM | Electro | Apparel | ||
BA CITY | ~70% | ||||
Market | |||||
Share | |||||
15 MALLS | |||||
332,000 sqm GLA | |||||
High income Area | 8 | ||||
Mid Income Area | |||||
Low Income Area |
Dot Building
Philips
Zetta
OFFICES BUILDINGS
Boston Tower | 200 Della |
Paolera | |
(IVQ FY20) |
SuipachaRepública
Intercontinental
Expanding Corporate North Area Business Center
AAA Location
Back Office Center
8 BUILDINGS 121,000 sqm GLA
PREMIUM PORTFOLIO
Surface by class
A+ & A 84%
16% B
PREMIUM TENANTS
Others | Technology | |
46% | 31% | 75% |
International
14%Tenants
9%
Oil & Energy
Banks & Insurance
Intercontinental
3 PREMIUM HOTELS ACROSS THE COUNTRY
Libertador
Llao Llao
Intercontinental | Libertador | Llao Llao Resort |
BA city | BA city | Bariloche city |
313 rooms | 200 rooms | 205 rooms |
RENTAL PROPERTIES´ RESILIENT REVENUE MODEL
FOR BOT H SHOP P IN G M ALLS AN D OFFICE AGRE E M E N TS
SHOPPING MALLS | OFFICES |
ARS
Variable
Base Rent
Base Rent
Fixed
Key money Base Rent
Brokerage fee
In advance | YEAR 1 | YEAR 2 | YEAR 3 |
USD
Per sqm | Per sqm | Per sqm |
YEAR 1 | YEAR 2 | YEAR 3 |
50% Fixed
VARIABLE & FIXED RENT
The company collects the | 74% |
highest between a % of tenant | |
of total | |
monthly sales and a minimum | |
revenues | |
fixed rent (base rent) |
OTHER REVENUES
26% of total revenues comes from key money, brokerage fee, stands, parking and non-traditional advertising
OFFICE AGREEMENTS
- 3-yearaverage term
- US Dollar based
- Rental rates for renewed terms are negotiated at market
conditions | 11 |
24% Variable
SHOPPING MALLS
OFFICE BUILDINGS
HOTELS
EXPENSES
CAPEX
COVID-19 IN ARGENTINA
IM PACT IN OUR BUSIN ESS
Operations closed since March 20th. The company decided to defer billing and collection of base rent and commercial fund from April to September 30, 2020, supporting tenants and prioritizing long-term relationship. We just charged common expenses.
Normal revenues collection during
lockdown period.
Shutted down since March 20th. Intercontinental Hotel just working under a contingency and emergency plan
Cut of nonessential expenses and services.
Cut of social security taxes and other taxes.
Construction works in Catalinas ("200 Della Paolera") and Alto
Palermo expansion suspended during lockdown. After the end of
the Fiscal Year, construction activity has been reestablished but
with some restrictions.
Common Expenses; | |||
20% | |||
Commercial fund; 8% | |||
Parking y Otros; 9% | |||
Key money ; 9% | |||
Variable rent; 21% | |||
GUARANTEED BY | |||
Base rent; 33% | |||
CONTRACT | |||
Situation pre Covid-19 | |||
(6M FY20) |
Working together with our tenants giving them all our support and help in this unprecedented
situation
8
SHOPPING MALLS
OP E RAT IN G FIGURES
GLA & OCCUPANCY
(GLA: sqm) | Pre COVID-19 |
95.0% |
SAME SHOPPING MALLS SALES
(% Var i.a.)
Pre COVID-19 | COVID-19 |
98.5%
94.7%93.2%
IIIQ20 Includes 10 |
days and IVQ the |
full impact from |
closure of |
operations |
344,025 | 332,150 | 333,062 | |||||
end of | |||||||
concession | |||||||
FY18 | FY19 | FY20 |
SHOPPING MALLS - DELINQUENCY
(ARS MILLION)
9M 20 | IVQ 20 | FY 20 | FY 19 | ∆ | |
Delinquency | 118 | 187 | 305 | 109 | 180% |
Revenues | 5,632 | 303 | 5,935 | 8,541 | -30.5% |
Delinquency/ | 2.1% | 61.7% | 5.1% | 1.3% | +3.8bps |
Revenues | |||||
22,3% | 22,7% | 27,3% | 28,7% | 24,4% | 24,7% | 29,6% | |
18,3% | |||||||
-2,1% | 2,8% | -0,1% | 1,6% | 1,2% | |||
-8,1% | |||||||
-15,5% | |||||||
-14,7% |
IVQ 17 IQ 18 IIQ 18 IIIQ 18 IVQ 18 IQ 19 IIQ 19 IIIQ 19
60,5% | |
46,2% | |
35,1% | 32,5% |
5,6% | |
-5,1% | |
-13,5% | -11,9% |
Nominal terms
Real terms
-90,4%-92,9%
IVQ 19 IQ 20 IIQ 20 IIIQ 20 IVQ 20
13
SHOPPING MALLS' 20 YEARS OPERATIONAL PERFORMANCE
CRISIS | 99% | CRISIS |
98%
99% | CRISIS… |
97%
97%
95%
Occupancy | 92% | 93% | |||
43% | 43% | ||||
38% | 40% | ||||
36% | |||||
36% | 34% | ||||
31% | |||||
31% | 33% | ||||
Tenant sales ARS/sqm | 24% | ||||
(annual ∆) | 20% | ||||
15% | 21% | ||||
15% | 17% | ||||
11% | 7% | ||||
7% |
CPI + GDP
-5%
(annual ∆)
-18%
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
COVID-19 MALLS´ REOPENING
ACCORD IN G TO IRSA COM M E RCIAL P ROP E RT IES' P ROTOCOL
May | June | July | August | September | October |
PORTFOLIO IN OPERATION
85%
BY GLA AND
SALES
PROTOCOL
STRICT SAFETY AND HYGIENE | REDUCED HOURS AND | SOCIAL DISTANCE |
COMMUNICATION, TRAINING | ||
MEASURES | TRAFFIC | AND INCENTIVES |
15
OFFICE BUILDINGS
STOCK
(GLA: sqm)
200 Della | |||||
Paolera | |||||
+4.8% | |||||
121,144 | |||||
28,000 | |||||
Zetta | |||||
Building | Bouchard | ||||
115,378 | 115,640 | 710 | |||
83,213 | 93,144 | ||||
Boston | |||||
Tower | |||||
FY18 | FY19 | FY20 | |||
IH21E | |||||
OP E RAT IN G FIGURES
OCCUPANCY BY CLASS | Pre COVID-19 | COVID-19 | |||||||
A+ & A | 97,2% | 96,6% | 97,1% | ||||||
93,9% | |||||||||
93,0% | |||||||||
B | ||||||||||
53,2% | 52,4% | |||||||||
47,5% | ||||||||||
46,2% | ||||||||||
45,0% | ||||||||||
IVQ 19 | IQ 20 | IIQ 20 | IIIQ 20 | IVQ 20 |
LEASES | Pre COVID-19 | COVID-19 |
(USD/sqm/month) |
26,4 | 26,6 | 26,9 | 26,6 | 26,6 |
IVQ 19 | IQ20 | IIQ 20 | IIIQ20 | IVQ 20 |
16
July 2020
BOUCHARD 710
Entire building - 12 floors
15,0145,800
GLA sqmUSD/sqm
USD 87.2 mm | 16% |
Price | USD IRR |
RECENT SALES
OFFICE BUILDINGS
PARTIAL SALES
June 2020 | July and August 2020 | |||
200 DELLA | BOSTON | |||
PAOLERA | TOWER | |||
2 floors | 6 floors | |||
2,430 | 7,482 | |||
GLA sqm | GLA sqm | |||
USD 16.9 mm | USD 41.4 mm | |||
Price | Price | |||
6,940 | 5,500 | |||
USD/sqm | USD/sqm | |||
~28,000 | ~7,380 | |||
Remaining GLA sqm | Remaining GLA sqm | |||
AVERAGE CAP RATE 6.0%
12
ACTIVE PORTFOLIO MANAGEMENT
CAPITAL CONTROLS | CAPITAL CONTROLS | |||
Intercontinental | 200 Della | Boston | ||
5,000 | ||||
Paolera | ||||
Acquisitions | 200 Della Paolera | Tower | ||
Sales | 4,500 |
A+ Offices prices | Maipú | ||||||||||||||||||||||
USD/sqm | Rulero | Bouchard 710 | |||||||||||||||||||||
Intercontinental | |||||||||||||||||||||||
Boston Tower | |||||||||||||||||||||||
2,450 | Bouchard Plaza | Bouchard Plaza | Dique IV | ||||||||||||||||||||
Rulero | |||||||||||||||||||||||
Bouchard 710 | Flight to quality | ||||||||||||||||||||||
Yacht V & VI | |||||||||||||||||||||||
Maipú | República | ||||||||||||||||||||||
710 | Zetta Building | 200 Della Paolera | |||||||||||||||||||||
Opened in May 2019 | Currently under development | ||||||||||||||||||||||
1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Fuente: L.J. Ramos - Colliers | 18 |
PROJECTS
UNDER
DEVELOPMENT
200
DELLA
PAOLERA
ALTO PALERMO
EXPANSION | 3,900 | |
GLA sqm | ||
64% | ||
Works Progress | ||
FY21 | ||
Est. Opening date | ||
USD 28.5mm | ||
Est. Investment | ||
~USD 6.2mm | ||
CAPEX deployment pending | ||
200 DELLA PAOLERA | ||
35,000 | 95% | 61% |
Total GLA | Works Progress | Commercialization Progress |
28,000 | IH21 | ~USD 5.8mm |
IRCP GLA | Est. Opening date | CAPEX deployment pending |
~USD 90mm | Construction works suspended during COVID-19 |
lockdown. After the end of the Fiscal Year, | |
Est. Investment | |
~USD 10mm | construction activity has been reestablished but |
working with protocol restrictions. | |
Est. Stabilized Revenues | |
Both openings are delayed. | |
19
LAND RESERVES
& OTHER INVESTMENTS
20 million sqm in landbank
Capacity to almost double the current commercial property portfolio
San Martín | CEC | CEC | |
Punta del Este | |||
Caballito | Intercontinental II | La Adela (Luján) |
Córdoba Shopping Adjoining | La Plata | Montevideo |
plot | ||
20
20
SANTA MARÍA DEL PLATA (BA City)
Approvals pending
~700,000 sqm
Premium mixed-use Real Estate to be developed in the best location of BA city
Operational and
Financial Performance
22
IRCP - HISTORICAL FREE CASH FLOWS
USD M ILLION
141.9 | Adjusted EBITDA | 32.9 | FCF | 28.7 | Dividends | ||
FY16-FY20 Average | FY16-FY20 Average | FY16-FY20 Average | |||||
CENTROS COMERCIALES | ZETTA BUILDING | |
OFICINAS | CATALINAS ("200 DELLA PAOLERA") | |
OTROS | OTRO CAPEX | |
178 | 168 | |||||||
9 | 162 | |||||||
4 | ||||||||
20 | 2 | |||||||
21 | ||||||||
19 | ||||||||
111 | ||||||||
26 | 90 | |||||||
149 | 4 | |||||||
143 | 141 | 28 | ||||||
93 | ||||||||
58 | ||||||||
FY 16 | FY 17 | FY 18 | -8 | |||||
FY 19 FY 20 |
99 | ||||
16 | ||||
69 | ||||
58 | ||||
41 | 16 | 27 | 60 | 38 |
5 | ||||
26 | 10 | 14 | ||
37 | ||||
32 | 23 | 23 | ||
15 | ||||
FY 16 | FY 17 | FY 18 | FY 19 | FY 20 |
68 | 69 | 62 | ||||||||||||
49 | 49 | 38 | 38 | 45 | 50 | 39 | ||||||||
29 | ||||||||||||||
15 | 15 | 10 | ||||||||||||
FY 16 | FY 17 | FY 18 | FY 19 | FY 20 | FY 16 | FY 17 | FY 18 | FY 19 | FY 20 | FY 16 | FY 17 | FY 18 | FY 19 | FY 20 |
Adjusted EBITDA | CAPEX1 | |
Interests paid + Income tax | FCF -26 | Dividends |
1. | Includes "200 Della Paolera" (Catalinas) | |
2. | LTM June 30, 2020. Adjusted Avg. FX: $68.07 | 23 |
IRCP - ASSETS VALUATION
FAIR VALUE ACCORD IN G TO FIN AN CIAL STAT E M ENTS AT T HE E N D OF EACH P E RIOD
EVOLUTION BY TYPE OF ASSET
(USD M ILLION - OFFICIAL FX)
2,155 | 2,170 | ||||||
91 | 106 | 1,878 | |||||
296 | 337 | ||||||
158 | 1,669 | ||||||
334 | 1,424 | 174 | |||||
158 | |||||||
459 | 827 | ||||||
1,769 | 1,728 | ||||||
1,387 | |||||||
807 | 669 | ||||||
FY16 | FY17 | FY18 | FY19 | FY 20 | |||
Shopping Malls | Offices | Land Reserves & Others | |||||
EVOLUTION BY SQM | |
(USD ) | Valuation method: |
Shopping Malls: DCF | |
Offices: Comparables |
5,757 OfficialFX
5,290
5,081 | ||||
4,003 | 4,032 4,011 | 3,979 | 4,035 Blue-chip | |
3,740 | swap FX |
2,431
2,007
FY16 | FY17 | FY18 | FY19 | FY 20 | ||
Shopping Malls | Offices | |||||
24
IRSA - NET ASSET VALUE
AS OF JUN E 3 0 , 2 0 2 0 - USD M ILLION
1,536 GAV | 1,136 NAV | 26.7% LTV | ||
NAV
368 | 410 | |
27 | 58 | |
1,536 | ||
1,083 | 1,136 |
IRCP NAV | Hotels | Banco Hipotecario1 | Landbank & Others 2 | Gross Asset Value | Net Debt | Net Asset Value |
- Book value as of June 30, 2020
- Book value as of June 30, 2020. "Others" includes investment in Condor Hospitality Trust and Israel at zero market value
25
IRSA STAND ALONE
BY CALE NDAR Y EAR AS OF SE P T EMBER 3 0 , 2 0 2 0 - USD M ILLION
Description | Amount | Maturity |
Short term debt | 22.0 | <360 days |
Series I | 181.5 | Nov 2020 |
Series III | 4.6 | Feb 2021 |
Series IV | 51.4 | May 2021 |
Series V | 9.2 | May 2022 |
Series VI | 4.4 | Jul 2021 |
Series VII | 33.7 | Jan 2022 |
Other Debt | 17.6 | Feb 2022 |
GROSS DEBT | 324.4 | |
CURRENT SCHEME | 207.8 | ||||
DOES NOT INCLUDE | |||||
INTERCOMPANY LOAN WITH | |||||
IRCP | SERIES I | ||||
70.7 | |||||
To be exchanged for | 45.9 | ||||
USD 181,5 | |||||
2020 | 2021 | 2022 |
PROFORMA AMORTIZATION SCENARIOS
01 | 80% OPTION A | 02 | 50% OPTION A | 03 | 100% OPTION B | ||||||||||||
20% OPTION B | 50% OPTION B | ||||||||||||||||
99.7 | 108.9 | ||||||||||||||||
88.9 | |||||||||||||||||
29.0 | 74.9 | 64.1 | 72.6 | 70.7 | |||||||||||||
18.2 | |||||||||||||||||
50.8 | 45.9 | ||||||||||||||||
29.0 | 18.2 | 108.9 | |||||||||||||||
26.3 | 26.3 | 26.3 | |||||||||||||||
72.6 | |||||||||||||||||
70.7 | 70.7 | 70.7 | |||||||||||||||
45.9 | 50.8 | 45.9 | 45.9 | ||||||||||||||
26.3 | 26.3 | 26.3 | |||||||||||||||
2020 | 2021 | 2022 | 2023 | 2020 | 2021 | 2022 | 2023 | 2020 | 2021 | 2022 | 2023 |
26
CAPITAL MARKETS TRACK RECORD
NUMBER OF TRANSACTIONS | AMOUNT ISSUED | GROUP LISTED VEHICLES | NON-DEFAULT HISTORY | ||||
+200 | +USD 17bn | 5 | New York, Buenos Aires, | Even in the worst | |||
& Sao Paulo | Argentinean crisis (2001) | ||||||
IRSA IPO
APSA
APSA IPO (now IRCP)
CRESUD | LIABILITY |
FOLLOW ON | MANAGEMENT |
Tender offer IRSA bonds New IRCP
LOCAL MARKET
BA & NY LISTING
BA & NY LISTING
APSA & IRSA CONVERTIBLE NOTES
USD 288 MM Regional expansion
USD 360 MM bond IRCP 8% SPO USD 138 MM
DOLLAR LINKED ISSUANCES
USD 265 MM
1994 | 1997 | 2000/1 | 2006 | 2008 | 2012 | 2016/7 | 2018/9 | 2020 |
CRESUD US LISTING | BRASILAGRO IPO | BRASILAGRO US | DEBT | DURING | ||||
REFINANCING | COVID-19 | |||||||
Follow on | USD 276 MM | LISTING | ||||||
CRESUD USD 246 MM | PANDEMIC | |||||||
USD 92 MM | Company Foundation | |||||||
IRSA USD 227 MM | ||||||||
27
Thanks!
28
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Disclaimer
IRSA - Inversiones y Representaciones SA published this content on 26 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2020 20:09:10 UTC