Deutsche Wohnen to issue €800m of convertible bonds; other listed firms also eyeing issues

German listed residential property owner Deutsche Wohnen has announced plans to issue €800m of convertible bonds.

The bonds will offer a conversion premium of 40% to 45% above the reference share price and a coupon of 0.10% to 0.60%. They will be due in 2026. The company intends to use part of the proceeds to repurchase €400m of convertible bonds due in 2021.

Bonds seem to be flavour of the month. Demire Deutsche Mittelstand Real Estate also announced this month that it had placed an additional €130m of its rated, unsecured corporate bond (senior notes), originally issued in July this year, with an interest rate of 2.875 % p.a. and a term until 2022, at an issue price of 101.25%.

The tapped corporate bond was issued under New York law and admitted to trading on the Luxembourg Stock Exchange (Euro MTF Market). The net proceeds from the issue will be used to refinance the outstanding liabilities - including prepayment penalties and other transaction costs - of Germavest S.à.r.l., an indirect subsidiary of Demire, to the tune of €94m.

Earlier this week, Austrian listed property firm CA Immobilien Anlagen said it plans to issue a senior, unsecured bond of €200m. The bonds will bear a semi-annual coupon set at 0.75% p.a. The initial conversion price has been set at €30.5684, representing a premium of 27.5% above the volume weighted average price (VWAP) of the CA Immo shares on the Vienna Stock Exchange on the launch date of 4 October 2017 equal to €23.9752. The bonds will be issued at 100% of their nominal value of €100,000 per bond and will be redeemed, if not previously converted, at 100% of the nominal value.

‘This transaction marks another important milestone in the optimisation of our financing structure. Aside from a further reduction in average borrowing costs, it will serve to improve the maturity profile of financial liabilities while raising the quota of hedged financial liabilities,’ said Dr. Hans Volckens, CFO of CA Immo.

Last week, fellow Austrian investor Immofinanz also invited holders of its €515.m (currently outstanding €287.3m) 4.25% senior unsecured convertible bonds due in 2018 to convert their bonds into ordinary shares of Immofinanz and Buwog. This would entitle bondholders to convert each bond in the nominal value of €4.12 to 1.241 shares and 0.0653 Buwog shares. The convertible bond is due on 8 March 2018. The right to convert to shares can be exercised until 26 February 2018.