German real estate company TAG Immobilien has issued a €500 mln corporate bond with a maturity of 5.5 years and a coupon rate of 4.25%.
The bond was offered to institutional investors and was oversubscribed by nearly 5 times.
The proceeds will be used for general corporate purposes, such as expanding its Polish rental portfolio, refinancing existing debt, and improving its investment-grade credit rating.
Martin Thiel, CFO and Co-CEO of TAG, commented: ‘The successful placement of our corporate bond is an important step in the diversification of our financing sources. The successful bond issue also strengthens our two investment grade ratings by increasing our use of unsecured instruments.’
BofA Securities, Deutsche Bank, J.P. Morgan, and Société Générale acted as joint bookrunners for the bond issuance.
Earlier this month, TAG reported that rental income in Germany and Poland totaled €88.1 mln in H1 2024, slightly down on the previous year’s level of €89.1 mln, despite the disposal of residential units in Germany.
The company disposed of approximately 1,400 residential units in 2023 in Germany and signed contracts for another 880 units between January and June 2024. The total sales price for these units was €78.4 mln, with an average gross yield of 5.2%. After repaying bank loans, the company expects to receive net cash proceeds of €66.2 mln.
In Poland, TAG finalized the construction of 2,630 residential apartments, a figure that is expected to grow to around 3,350 by the end of 2024. The company plans to expand its portfolio to approximately 10,000 rental units by the end of 2028.
