Brookfield locks in $1.45b debt refi for Aveo; five banks underwrite

afr.com:

Canadian infrastructure giant Brookfield Asset Management has locked in a $1.45 billion refinancing for its seniors living business Aveo, which it took private four years ago as a turnaround play.

Aveo was taken private by Brookfield in 2019. Rob Homer

Five banks, including ANZ, Barclays, Malaysia’s MayBank, National Australia Bank and Westpac have underwritten the senior debt facility. They are expected to start syndicating it to investors soon with an eye on hitting financial close by mid-August.

The new four-year facility comes as Brookfield has been whipping the business into shape. Aveo hit industry-leading record unit sales in the past two years at 1250 units in 2021 and 1504 in 2022, sources said.

The refinancing will help Brookfield roll over the debt that was due to mature in November 2024, while giving it dry powder to fund capacity development and working capital for future expansion.

Aveo has 90 retirement villages across Australia. It also plays in home care as a provider of Commonwealth-funded services in the sector.

Brookfield plucked the business off the ASX boards in 2019 for a $2 billion enterprise valuation or a $1.3 billion equity value, swooping in with a 28 per cent premium at a time when its target was caving under regulatory scrutiny.

Demand for Aveo’s units plummeted following media scrutiny on its contracts with residents, which included high exit fees and other complex clauses. It led to the Australian Competition and Consumer Commission opening an investigation into Aveo. One year later, the federal government launched a royal commission into the aged care sector.

Alongside the regulatory troubles, Aveo was hit was a slump in real estate markets as well as liabilities to buyback units from