Adler / all RE names - comment

The 3LNs should be softer today. On its Q126 call, Adler confirmed weakness in the German RE market, as institutional investors are holding off on purchases amid higher interest rates following the war in Iran. Overall, this is what our tail-risk short on Aroundtown is targeting, although the effect so far is not as strong as we feared. As concerns Adler specifically, the proceeds from divestments are struggling to contain the 1L PIK and LTV leverage continues to creep up. EBITDA is now €14m, but operating cash flow remains negative on divestiture activity. The refinancing wall in 2028 is coming into view, but the company can’t yet comment on concrete plans as deliberations are “ongoing” with Evercore.