Senior Notes from CB Richard Ellis – Analyst Blog

CB Richard Ellis Group Inc. (CBG), the world’s largest commercial real estate services firm (on the basis of 2009 revenues), has recently announced an offer to sell 6.63% senior notes due 2020 worth $350 million. BofA Merrill Lynch, the investment banking and wealth management division of Bank of America Corporation (BAC); Credit Suisse Group (CS); HSBC Holdings plc (HBC); and Barclays plc (BCS) are acting as joint book-running managers for the offering.

 

CB Richard Ellis expects to generate net proceeds of $342.3 million from the debt offer. The company intends to utilize the proceeds to repay a part of the total outstanding debt under its unsecured revolving credit facility.

 

As of September 30, 2010, CB Richard Ellis had total outstanding debt of $1.5 billion under its existing credit agreement. The company is currently seeking to pre-pay or refinance the debt with approximately $500 million of available cash, net proceeds from the debt offer, and up to $650 million of secured term loans under new senior secured credit facilities. In addition, CB Richard Ellis is also planning to procure a new $700 million secured revolving credit facility.

 

CB Richard Ellis is the global market leader in commercial real estate brokerage and advisory services for property leasing and sales, forecasting, valuations, origination and servicing of commercial mortgage loans, as well as project and real estate investment management. The company has a broad range of real estate products and services, and an extensive knowledge of domestic and international real estate markets that enables it to operate as a single-source provider of real estate solutions.

 

CB Richard Ellis offers a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate assets globally under the CB Richard Ellis brand and provides development services under the Trammell Crow brand.

 

The rating on CB Richard Ellis is currently “Neutral” with a Zacks #2 Rank, which translates to a short-term ‘Buy’ recommendation and indicates that the stock is expected to perform well above the overall U.S. equity market for the next 1−3 months.