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Bafin intervenes in the Adler case, the update on the 2.25% 2027 bond in euros
New development in the Adler folder. BaFin, the German financial policeman, has decided to scrutinize the financial reports published by Adler, one of the largest German real estate groups.
The investigation, revealed by the German business daily Handelsblatt and confirmed by a BaFin spokeswoman to Reuters, follows accusations made a few months ago against the Adler group by the American company Viceroy Research.
"A hotbed of fraud"
Founded by Fraser Perrin, one of the first to accuse Wirecard of accounting fraud, the American company is known for conducting independent investigations into companies suspected of questionable practices. "The Adler Group is a hotbed of fraud, deception and false financial statements aimed at hiding its true financial situation, which is gloomy," said the note published in October 2021. "Its balance sheet has been artificially inflated significantly, its shares are not recommendable and its bonds will almost certainly default resulting in very significant impairments," the document also reads.
Publication of deferred accounts
Since then, Adler has rejected these allegations. It also divested assets to generate liquidity and meet its financial commitments. In addition, an in-depth audit of its accounts is currently being conducted by its auditor, KPMG Luxembourg, which has led to the postponement of the publication of the 2021 annual accounts to "a later date", according to a statement published on 28 January. "It is highly unlikely that the outcome of the audit can be concluded in sufficient time to allow the publication of the financial accounts by March 31, 2022 at the latest," the document said. Investors will therefore have to wait before seeing more clearly. And, it is well known, they hate uncertainty, which is paid cash on the markets.
Hazard pay
To name but a few, the Adler Group SA bond at a price of 2.25% and with a maturity equal to 27 April 2027 is trading at a clear discount on the secondary market. Indeed, the latest prices are around 81.12% of the nominal. In other words, investors demand a return of around 6.66%, and therefore a large risk premium, to agree to lend their money to the German real estate group.
This bond strain denominated in denominations of 100,000 euros is also rated "BB-" in the "High yield" category at Standard & Poor's.
Bafin intervenes in the Adler case, the update on the 2.25% 2027 bond in euros
New development in the Adler folder. BaFin, the German financial policeman, has decided to scrutinize the financial reports published by Adler, one of the largest German real estate groups.
The investigation, revealed by the German business daily Handelsblatt and confirmed by a BaFin spokeswoman to Reuters, follows accusations made a few months ago against the Adler group by the American company Viceroy Research.
"A hotbed of fraud"
Founded by Fraser Perrin, one of the first to accuse Wirecard of accounting fraud, the American company is known for conducting independent investigations into companies suspected of questionable practices. "The Adler Group is a hotbed of fraud, deception and false financial statements aimed at hiding its true financial situation, which is gloomy," said the note published in October 2021. "Its balance sheet has been artificially inflated significantly, its shares are not recommendable and its bonds will almost certainly default resulting in very significant impairments," the document also reads.
Publication of deferred accounts
Since then, Adler has rejected these allegations. It also divested assets to generate liquidity and meet its financial commitments. In addition, an in-depth audit of its accounts is currently being conducted by its auditor, KPMG Luxembourg, which has led to the postponement of the publication of the 2021 annual accounts to "a later date", according to a statement published on 28 January. "It is highly unlikely that the outcome of the audit can be concluded in sufficient time to allow the publication of the financial accounts by March 31, 2022 at the latest," the document said. Investors will therefore have to wait before seeing more clearly. And, it is well known, they hate uncertainty, which is paid cash on the markets.
Hazard pay
To name but a few, the Adler Group SA bond at a price of 2.25% and with a maturity equal to 27 April 2027 is trading at a clear discount on the secondary market. Indeed, the latest prices are around 81.12% of the nominal. In other words, investors demand a return of around 6.66%, and therefore a large risk premium, to agree to lend their money to the German real estate group.
This bond strain denominated in denominations of 100,000 euros is also rated "BB-" in the "High yield" category at Standard & Poor's.
