LEG Immobilien first €500m bond four times oversubscribed
Listed German housing company LEG Immobilien AG placed its first corporate bond, with a nominal value of €500m, with institutional investors earlier this month. The unsecured fixed-rate bond is paying an annual coupon of 1.25%, and matures on the 23rd January 2024.
LEG said it had taken the bond out on a European roadshow, where "strong interest for LEG's business model and significant investor demand" saw the bond being four times oversubscribed. HSBC and JP Morgan were active bookrunners, while BNP Paribas, Morgan Stanley and Société Générale were passive bookrunners on the issue.
Moody's gave the bond a Baa1 rating, the same as it rates the MDAX-listed LEG Immobilien itself.
According to Eckard Schultz, LEG Immobilien's CFO, the company is making a renewed effort to gain long-term benefit from attractive financing terms and access to the bond markets. The bond issue will be used to refinance existing subsidised loans and commercial bank loans, as well as for general purposes. "With the issue of its first corporate bond, LEG further diversifies its funding sources and underscores the company’s ample access to all key financing markets,” he said.
The bond issue will help LEG to lower its average financing costs to below 2.0%, with average debt maturity remaining at the high level of about 10 years.
The Düsseldorf-based LEG owns and manages 130,000 with about 350,000 residents. It generated rental income in full-year 2015 of €645m.