IMMOFINANZ Bonds

Financing strategy and further optimisation of the capital structure

The objectives of IMMOFINANZ’s financing strategy are to ensure sufficient liquidity at all times, to achieve and maintain a balanced capital structure and maturity profile, and to optimise financing costs. The best possible structuring of debt financing is an important priority and, in addition to successful property management, represents a decisive factor for the results generated by the company’s business activities.

The 2021 finnacial year 

Financing with a total volume of EUR 414.1 million was concluded in 2021. That represents 13.4% of the total financial liabilities as of 31 December 2021 and involves extensions as well as new financing. Financial liabilities amounted to EUR 3.1 billion as of 31 December 2021 (31 December 2020: EUR 3.2 billion). Cash and cash equivalents, including cash held for sale, totalled EUR 987.1 million (31 December 2020: EUR 1,051.4 million). Net debt, i.e. debt after the deduction of cash and cash equivalents held by the Group, equalled EUR 2.1 billion (31 December 2020: EUR 2.1 billion).

IMMOFINANZ AG concluded an unsecured, revolving corporate credit line of EUR 100.0 million at the end of March 2020 with a term that was extended to 30 June 2023 during the year 2021. It can be used at the company’s discretion and gives IMMOFINANZ additional financial flexibility. The credit line was unused as of 31 December 2021 and is therefore available in full.

Robust balance sheet structure

As of 31 December 2021, IMMOFINANZ had a robust balance sheet structure with an equity ratio of 48.1% (31 December 2020: 45.1%) and a net loan-to-value ratio (net LTV) of 36.7% (31 December 2020: 37.8%).

The indicator net LTV compares the carrying amount of financing, less cash and cash equivalents, with the total carrying amount of the properties and the EPRA NAV (EUR 28.28 as of 30 September 2021) for the roughly 19.5 million shares held in S IMMO AG (S IMMO).

Constant financing costs

The average financing costs for IMMOFINANZ, including derivatives, equalled 1.92% per year as of 31 December 2021 (31 December 2020: 1.99% per year). The hedging quota remained stable at 88.8% (31 December 2020: 88.6%).

Unencumbered assets

In addition to properties which carry external financing and are encumbered through standard market collateral (e.g. mortgages, pledge of company shares), EUR 1,476.8 million, or 28.6% of the total property portfolio, were not externally financed and therefore unencumbered as of 31 December 2021 (31 December 2020: EUR 1,482.8 million or 28.9%). Including the S IMMO shares (valued at the EPRA NAV as of 30 September 2021), which are also unencumbered, this value increases to EUR 2,028.2 million or 35.5%.

Composition of financial liabilities

The financial liabilities held by IMMOFINANZ are denominated entirely in euros and consist of amounts due to financial institutions as well as liabilities from bonds. The composition of these liabilities as of 31 December 2021 is as follows:

Weighted average interest rate of the financial liabilities

Outstanding liability
in TEUR as of 31 12 2021

Total average interest rate incl.
expenses for derivatives in %1

Convertible bonds2

283,215.7

1.50

Corporate bonds

982,115.1

2.56

Bank liabilities3

1,819,582.0

1.64

IMMOFINANZ

3,084,912.9

1.92

1 Based on nominal remaining debt, excluding mandatory convertible bond
2 Convertible bond 2017–2024 (coupon reduction to 1.5% following the receipt of an investment grade rating). After conversions, only EUR 9.7 million were outstanding at the end of March. The mandatory convertible bond was subject to early mandatory conversion at the beginning of October 2021.
3 Including IFRS 5

The remaining balance of the financial liabilities held by IMMOFINANZ totalled EUR 3,084.9 million as of 31 December 2021.

Bonds

The outstanding nominal value of the bonds totalled EUR 1,277.3 million as of 31 December 2021 (31 December 2020: EUR 1,397.3 million). It is attributable to the convertible bond issued in January 2017 with a term ending in 2024 (current conversion price: EUR 20.6333), which was almost fully converted in January 2022 following a change of control event, as well as two benchmark corporate bonds that were issued in January 2019 and October 2020.

The mandatory convertible bond 2023 with a volume of EUR 120.0 million which was issued in 2020 was converted prematurely in 2021. On 26 August 2021, IMMOFINANZ announced its intention to exercise its premature mandatory conversion right in accordance with the issue terms for the subordinated mandatory convertible bond. This step was made possible by the increase in the share price. The conversion took place at the applicable conversion price of EUR 17.1472. The shares were delivered from IMMOFINANZ’s stock of treasury shares on 5 October 2021. This premature conversion results in future coupon savings of approximately EUR 8.6 million for the company (calculated up to the original end of the bond term in 2023).

Convertible bond 2017–2024

IMMOFINANZ was informed on 3 December 2021 through a voting rights announcement in accordance with § 130 of the Austrian Stock Exchange Act of 2018 that the CPI Property Group ("CPIPG") held an investment, directly and indirectly, of approximately 21.4% in the share capital of IMMOFINANZ AG. This investment gave CPIPG a controlling interest in IMMOFINANZ AG as defined in § 22 in connection with § 27 of the Austrian Takeover Act. The conversion price was therefore temporarily adjusted to EUR 18.8987 in accordance with the issue terms (before the adjustment: EUR 20.6333) up to the control date on 19 January 2022. This adjustment led to conversions with a total nominal value of EUR 282.8 million. The conversions were serviced in the financial year 2022 through the issue of 14,963,965 new shares.

A further EUR 0.5 million were converted in February 2022, and the resulting 24,232 shares were delivered in March 2022. An additional conversion of EUR 1.5 million took place in March 2022, which means only EUR 9.7 million of the convertible bond are currently outstanding. The shares for the conversion in March will be delivered in April 2022.

   

ISIN

Maturity

Coupon in %

Nominal
value as of
31 12 2020
in TEUR

Repurchases/
redemptions/
conversions/
new issues
2021 in TEUR

Nominal
value as of
31 12 2021
in TEU

Corporate bond

XS1935128956

27 01 2023

2.63

482,800

0

482,800

Corporate bond

XS2243564478

15 10 2027

2.50

500,000

0

500,000

Convertible bond

XS1551932046

24 01 20241

1.502

294,500

0

294,500

IMMOFINANZ

2.32

1,277,300

0

1,277,300

Mandatory convertible 
bond3

AT0000A2HPN2

23 07 2023

4.00

120,000

-120,000

0

IMMOFINANZ

n. a.

1,397,300

-120,000

1,277,300

1 End of the bond term in 2024; put option for bondholders on 24 January 2022
2 Coupon reduced by 50 basis points to 1.50% as of 24 January 2019 following the receipt of an investment grade rating.
3 The mandatory convertible bond represents a hybrid financial instrument which must be separated into equity and debt components on initial recognition. The regular interest payments are classified as a financial liability, while the mandatory conversion is considered an equity component. This bond underwent mandatory conversion at the beginning of October 2021.

Change of control event – corporate bonds

At the beginning of March 2022, i.e. after the end of the reporting year, the purchase of shares by CPI Property Group triggered a change of control event as defined in § 5(6)(b) of the bond terms. It entitles the holders of the corporate bond 2019–2023 and the corporate bond 2020–2027 to exercise their put right at 101% of the nominal value plus accrued interest as of the sale date.