Finance  ·  Distress

Avison Young Restructures Debt After Credit Rating Downgrade and Loan Default

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Avison Young is shoring up some of its finances after its rapid growth put the real estate brokerage in debt and it recently defaulted on a loan.

The company announced Monday morning that it struck a debt restructuring deal with its lenders that “reduced its financial obligations by more than half” while it acquired additional financing for operations.

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A spokesperson for Avison Young said the firm has not missed any payments on loans. S&P Global downgraded the company’s credit rating to “selective default” on Friday after the agency said Avison Young missed the window to pay quarterly principal and interest on a senior secured term loan in 2023.

S&P did not say how much the debt was or who it was owed to, and Avison Young declined to provide any details of its finances.

Avison Young CEO Mark Rose took an optimistic tone in a prepared statement.

“This transaction … positions Avison Young with the financial flexibility to invest in growth and continue to deliver for our clients,” Rose said in a statement. “[Avison Young is] confident that our principal-led culture, alongside a stronger balance sheet, will provide us with a distinct advantage as the industry recovers. Our financial partners have been very supportive throughout this process.”

Once the deal officially closes in March, Avison Young expects that its credit rating will be updated by S&P and other rating agencies. 

Avison Young declined to provide the details of the cost-cutting measures. It is not known if layoffs are in store.

The Toronto-based brokerage set up shop in New York City in 2012, attracting talent like Mitti Liebersohn and Arthur Mirante to build up its tri-state operations, but the firm’s New York operations were left in an uncertain position when they both were poached by Savills in June 2022.

Mark Hallum can be reached at mhallum@commercialobserver.com.