IMMOFINANZ Bonds

Financing Strategy and 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 also 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 First Three Quarters of 2020

Conservative financing structure

Financial liabilities (excluding lease liabilities of EUR 78.5 million in accordance with the application of IFRS 16; including IFRS 5) totalled EUR 2.7 billion as of 30 September 2020 (31 December 2019: EUR 2.8 billion). Cash and cash equivalents, including cash and cash equivalents held for sale, rose to EUR 601.9 million (31 December 2019: EUR 345.1 million), above all due to the capital measures carried out in July. Net debt, i.e. debt after the deduction of cash and cash equivalents held by the Group, equalled EUR 2.1 billion (31 December 2019: EUR 2.5 billion).

IMMOFINANZ AG concluded an unsecured, revolving credit line of EUR 100.0 million at the end of March 2020. It can be used at the company’s discretion up to 31 March 2022 and gives IMMOFINANZ added financial flexibility. This credit line was unused at the end of the reporting period and is therefore available in full.

Capital increase and placement of a subordinated mandatory convertible bond

In order to strengthen the company’s equity and the indicators relevant for the investment grade rating, IMMOFINANZ successfully completed a share placement and the issue of a mandatory convertible bond in July 2020. The gross issue proceeds totalled EUR 356.1 million.

A total of 15,418,824 shares were placed with institutional investors through an accelerated bookbuilding process under the exclusion of subscription rights. Share capital was increased by 11,208,526 to 123,293,795 shares, and 4,210,298 treasury shares were sold. The placement was completed at EUR 15.31 per share and led to gross issue proceeds of EUR 236.1 million.

IMMOFINANZ also issued a subordinated mandatory convertible bond with a total nominal value of EUR 120.0 million through an accelerated bookbuilding process with institutional investors under the exclusion of subscription rights. The initial conversion price was set at EUR 17.1472, which represents a 12.0% premium above the issue price of the shares in the current share placement. The three-year bond carries a coupon of 4.0% per year, payable semi-annually in arrears on 23 January and 23 July of each year. The subordinated mandatory convertible bond is therefore initially convertible into a total of 6,998,228 IMMOFINANZ shares and is classified as equity under IFRS and by the rating agency S&P (exception: future coupon payments).

Issue of a benchmark bond

In October 2020 and shortly after the end of the reporting period, IMMOFINANZ issued a senior unsecured bond with institutional investors. The bond has a benchmark volume of EUR 500 million, a seven-year term and a fixed coupon of 2.5% per year. The net proceeds from the issue will be used to refinance existing liabilities, to utilise value-creating opportunities for growth and for general corporate purposes.

Robust balance sheet structure

Development of the net LTV

IMMOFINANZ has a robust balance sheet structure with an equity ratio of 48.6% (31 December 2019: 46.0%) and a net loan-to-value ratio (net LTV) of 38.4% (31 December 2019: 43.0%).

Net LTV

 

Financing cost

The average financing costs for IMMOFINANZ, including derivatives, equalled 1.88% per year as of 30 September 2020 (31 December 2019: 1.91% per year). The hedging quota was stable at 90.3% (31 December 2019: 90.7%).

Unencumbered property

In addition to properties which carry external financing and are encumbered through standard market collateral (e.g. mortgages, pledge of company shares), EUR 1,381.1 million, or 27.1% of the total property carrying amount, were not externally financed and therefore unencumbered as of 30 June 2020 (31 December 2019: EUR 1,434.0 million or 27.3%). Including the S IMMO shares (valued at the EPRA NAV), which are not encumbered by any financing, this value increases to EUR 1,844.8 million or 33.2%.

Composition of financial liabilities

The financial liabilities held by IMMOFINANZ consist of amounts due to financial institutions as well as liabilities from bonds. The composition of these liabilities as of 30 September 2020 is as follows:

Weighted average interest rate of the financial liabilities

Outstanding liability
in TEUR as of 30 09 2020

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

Convertible bonds2

301,007.2

1.50

Corporate bond

491,434.2

2.63

Bank liabilities3

1,949,929.3

1.76

IMMOFINANZ

2,742,370.7

1.88

1 Calculation basis: actual remaining debt (nominal amount), excluding the
mandatory convertible bond
2 Convertible bond 2024 (coupon reduced to 1.5% after receipt of an investment
grade rating) at EUR 295.0 million and future coupon
payments
for the mandatory convertible bond 2023 which are
classified as debt.
3 Including IFRS 5

The remaining balance of the financial liabilities held by IMMOFINANZ totalled EUR 2,742.4 million as of 30 September 2020. As of that date, all financing was denominated in euros. 

Bonds

The outstanding nominal value of the bonds totalled EUR 902.3 million as of 30 September 2020 (31 December 2019: EUR 797.2 million). It is attributable to the convertible bond issued in January 2017 with a term ending in 2024 and a put option for the investors at the nominal amount in 2022, the subordinated mandatory convertible bond issued in July 2020 with a term ending in 2023 and the corporate bond issued in January 2019 with a term ending on 27 January 2023.

   

ISIN

Maturity

Interest
rate in %

Nominal
value as of
31  12 2019
in TEUR

Repurchases/
redemptions/
conversions/
new issues
2020 in TEUR

Nominal
value as of
30 09 2020
in TEU

Corporate bond

XS1935128956

27 01 2023

2.63

487,300

-12,700

500,000

Convertible bond

XS1551932046

24 01 20241

1.502

297,200

-2,200

295,000

IMMOFINANZ

2.20

797,200

-14,900

782,300

Mandatory convertible 
bond

AT0000A2HPN2

23 07 2023

4.00

0

120,000

120,000

IMMOFINANZ

n.a.

797,200

105,100

902,300

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.