Listed Austrian real estate company Immofinanz said on Wednesday that it is to issue EUR 650 mln in convertible bonds to help reduce the company's bank debt and to bring about a 'stark reduction' in financing costs. There is an option to increase the bond issue by EUR 100 mln.
Listed Austrian real estate company Immofinanz said on Wednesday that it is to issue EUR 650 mln in convertible bonds to help reduce the company's bank debt and to bring about a 'stark reduction' in financing costs. There is an option to increase the bond issue by EUR 100 mln.
The bonds have a maturity of seven years and will be offer exclusively to institutional investors outside the US. Based on Immofinanz's closing share price on 13 November of EUR 7.23 and a coupon rate of 1.25%, the bond will offer a minimum yield of between 3.25-3.75%.
Commenting on the bond issue, Immofinanz CEO Karl Petrikovics said: 'our profitability will consequently increase significantly, from which Immofinanz shareholders will profit'.
The company also expects to benefit from the current undervaluation of property shares compared to the underlying net asset value. 'We are extremely confident that the Immofinanz share price will be higher than the conversion price at maturity. As such, the convertible bonds represent an extremely cost-effective form of long-term financing.'
