German property company LEG Immobilien announced plans to issue €500 mln of 1% guaranteed senior, unsecured convertible bonds maturing on 4 September 2030.
The bonds will be issued by LEG Properties, the company's Dutch subsidiary, at a price equal to their principal amount. They will be convertible into 4.3 million ordinary registered company shares, representing approximately 5.7% of the current outstanding share capital. The pre-emptive rights of the company's shareholders (Bezugsrechte) have been excluded.
The bonds will be redeemed at 106.34% of their principal amount unless previously converted or repaid. The initial conversion price of €117.4748 represents a premium of 37.5% above the reference share price of €85.4362. The effective conversion price of the bonds is approximately €124.92 at maturity.
LEG Immobilien intends to use the net proceeds from the bond offering to refinance existing debt and for general corporate purposes.
The final price of the bonds will be determined after an accelerated bookbuilding process, with settlement expected on 4 September. Admission to trading on the Open Market segment (Freiverkehr) of the Frankfurt Stock Exchange will take place shortly thereafter.
The issuer will be able to redeem the bonds at their accreted redemption amount plus interest on or after 25 September 2028.
As part of the offering, the issuer and the company have agreed to a lock-up period of 90 days, subject to customary exemptions and waiver by the Joint Global Coordinators.
Earlier this month, LEG Immobilien announced it has raised its profit forecast for 2024 due to a strong H1 result and encouraging outlook for H2, as demand for affordable housing in Germany continues to increase. Since the beginning of 2024, LEG has agreed or completed the sale of around 2,900 flats for around €285 mln, slightly above book value overall.
LEG has around 167,000 rental apartments in Germany, accommodating some 500,000 residents.
