Deutsche Wohnen AG announced the successful placement of its inaugural unsecured, fixed-rate corporate bond maturing July 24, 2020 with an aggregate principal amount of €500 mln. The bond will bear a fixed-interest rate of 1.375% p.a. and is issued in a denomination of €1,000 with an issue date on or about July 24, 2015 and is expected to be admitted to trading on the regulated market of the Luxembourg Stock Exchange shortly thereafter.
The bond was offered to institutional investors after an extensive pan-European roadshow into selected jurisdictions in form of Reg S securities and met with great demand when launched, generating an order-book of almost €2 bln from around 130 different investors. The bond received a preliminary rating of A3 from the rating agency Moody’s Investors Service Limited and a preliminary rating of BBB+ from Standard & Poor’s Rating Services. The long-term issuer rating assigned to Deutsche Wohnen AG by the rating agencies is A3 and A- respectively.
Deutsche Bank, Société Générale, UBS Investment Bank, and UniCredit acted as active bookrunners and Goldman Sachs acted as passive bookrunner on the transaction.
The transaction marks the last key step of the announced refinancing of €1.5 bln in total. In this regard, approximately €650 mln of existing financial liabilities have been replaced by new bank loans with a ten year maturity and existing loans have been redeemed from the proceeds of the recent, successfully completed capital increase. The proceeds from the bond issue will be used to replace the existing, higher-interest bank liabilities.
With the refinancing Deutsche Wohnen AG will reduce its average interest rate from approximately 2.4% as of March 31, 2015 to below 1.9% while the average corporate debt maturity is approximately ten years. Due to the refinancing, the free cash flow will increase by approximately €54 mln p.a., of which approximately €33 mln will be as interest savings FFO effective. The LTV will be reduced to 45% up until 40%.
Source: Deutsche Wohnen AG