Jones Lang LaSalle has renegotiated its $875m debt facilities to give it more breathing space in the plunging global property market.
The New York-listed global property services firm has agreed with its lender to increase its maximum ‘leverage ratio’ – the multiple of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) – from 3.25 times to 3.5 times until September this year.
The interest rate on the facility has risen from 2% above LIBOR to 3%.
The banks also agreed to provide additions to JLL’s adjusted EBITDA to take into account certain one-off charges, such as redundancies, and to adjust other definitions in its agreements.
At 30 September 2008, JLL had net debt of $543m with an average interest rate of 4.7%. Its EBITDA was $62m, which it described as ‘significantly below’ the agreed threshold.
Since then the global property markets have deteriorated, which may have impacted on JLL’s fourth quarter performance. The firm is due to report its fourth quarter and full-year figures on 3 February.