Nicht kategorisiertAnalysis: Adler in crisis – over EUR 5 billion of bonds under risk
Adler Real Estate

Analysis: Adler in crisis – over EUR 5 billion of bonds under risk

Munich, 3 May 2022: Analysis: Adler in crisis – over EUR 5 billion of bonds under risk
Adler Real Estate AG (“Adler”), a leading (52,000 apartments) and listed real estate group (ISIN: DE0005008007; WKN: 500800) based in Berlin, is experiencing a tangible crisis. The group reported a loss in the billions in its consolidated annual report published on April 30, 2022. The share price went down to only EUR 3.88 at last count (as of May 2, 2022). The bonds are also experiencing price slides, in some cases to only around 42% of their nominal value (as of May 2, 2022).

What happened?

Already in the fall of 2021, accusations had been made about an excessively high debt ratio at Adler. Then, in October 2021, Fraser Perring’s investment firm Viceroy, known as the “wirecard hunter,” leveled allegations against Adler about questionable accounting practices, particularly in connection with the valuation of real estate and related-party transactions.

Adler responded by selling various properties to institutional investors and commissioning KPMG to conduct an forensic audit of its own balance sheet to invalidate the allegations of accounting irregularities. But KPMG report failed to exonerate Adler, especially since KPMG’s forensics experts were not granted access to nearly a million internal emails.

Now, on April 29, 2022, the big suprise: KPMG refuses to confirm the annual financial statements and issues a disclaimer of opinion (“Versagungsvermerk”). On this basis, Adler published the 2021 annual report on April 30, 2022 with the disclaimer of opinion and reported a loss in the billions.

What does this mean?

It is highly unusual for an auditor to refuse to certify the annual financial statements. Last infamous example is Wirecard, when the refusal led immediately to insolvency.

It is even more unusual that the Supervisory Board approves the annual financial statements despite a disclaimer of opinion by the auditor.

One reason for this remarkable step by the Supervisory Board: the bonds‘ terms and conditions. These stipulate that the “audited” consolidated financial statements must be published within 120 days after the end of the financial year. We are currently examining whether the publication with a disclaimer of opinion meets this requirement or whether this constitutes an event of default against the covenants under the bond terms. We are in close cooperation with financial experts, who are also examining whether the loan-to-value (LTV) ratio agreed as a covenant in the bond terms and conditions has been complied with.

What can creditors do now?

The most important group of creditors, the bondholders, must now organize themselves. Based on experience, it can be assumed that the banks secured at PropCo level have even tougher covenants, which Adler may have already breached.

In any case, if Adler is not already in talks, concessions such as waivers or similar will be negotiated with the bank creditors in the near future. This is regularly done for the purpose of avoiding a default under the loan agreements and subsequently a so-called cross-default possible under the bond terms and conditions. In our experience, it is essential for bondholders to organize themselves and be represented in the negotiations in order to participate in this restructuring process from the outset and on an equal footing. Otherwise, it is to be feared that the banks will further expand their already advantageous position to the disadvanage of the bondholders. Bondholders should also examine their own position, i.e. in particular whether there are already grounds for termination, in a timely manner.

DMR Legal is in close contact with institutional investors, investor protection associations such as the Schutzgemeinschaft der Kapitalanleger (SdK) and corporate finance advisors in order to analyze the situation and to protect the rights and interests of the bond in this crisis. Affected bondholders can register free of charge and receive a free initial consultation at:

Contact Person:

Tobias Moser
Dr. Tobias Moser


  • DMR Legal
  • Attorney-at-law Dr. Tobias Moser
  • Maximilianstr. 45
80539 Munich
Bonds affected:
  • ADLER Group S.A. EO-Notes 2017(17/24) Euro-Anleihe (WKN: A19L3U ISIN: XS1652965085)
  • ADLER Group S.A. EO-Exch. Bonds 2018(23) Euro-Anleihe (WKN: A2RUD7 ISIN: DE000A2RUD79)
  • ADLER Group S.A. EO-Notes 2020(20/25) Euro-Anleihe (WKN: A280V1 ISIN: XS2010029663)
  • ADLER Group S.A. EO-Notes 2020(20/26) Euro-Anleihe (WKN: A28357 ISIN: XS2248826294)
  • ADLER Group S.A. EO-Notes 2021(21/29) Euro-Anleihe (WKN: A287MT ISIN: XS2283225477)
  • ADLER Group S.A. EO-Notes 2021(21/26) Euro-Anleihe (WKN: A287MU ISIN: XS2283224231)
  • ADLER Group S.A. EO-Medium-T. Notes 2021(21/27) Euro-Anleihe (WKN: A3KP7A ISIN: XS2336188029)
  • ADLER Real Estate AG Anleihe v.2017(2017/2024) Euro-Anleihe (WKN: A2G8S3 ISIN: XS1731858715)
  • ADLER Real Estate AG Anleihe v.2018(2018/2023) Euro-Anleihe (WKN: A2G8WY ISIN: XS1713464441)
  • ADLER Real Estate AG Anleihe v.2018(2018/2026) Euro-Anleihe (WKN: A2G8WZ ISIN: XS1713464524)

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