DEMIRE issues EUR 600 million corporate bond and reduces financing costs significantly
 

- Benchmark corporate bond with 5-year maturity and coupon of 1.875% successfully placed

- Proceeds will be used to refinance the outstanding notes due 2022 and the refinancing of other debt as well as for general corporate purposes

- Average nominal financing costs post transaction decrease by about 90 bps to below 2.0%
 

Langen, 30 September 2019 - Today, DEMIRE Deutsche Mittelstand Real Estate AG (WKN A0XFSF / ISIN DE000A0XFSF0) successfully placed EUR 600 million unsecured fixed rate senior notes with a 5-year maturity and a 1.875% coupon (the "Notes") with institutional investors across Europe. The order book at pricing was significantly oversubscribed.

The net proceeds of the issue of the Notes will be used to refinance the outstanding notes due 2022 (outstanding volume: EUR 366.6 million, coupon 2.875%,  ISIN XS1647824173 / ISIN XS1647824686) and the repayment of a promissory notes loan also due in 2022 (outstanding volume: EUR 142.1 million, coupon 4.0%) as well as for general corporate purposes. The new bond financing and the repayment of the existing debt significantly improves the overall financing and maturity profile and reduces the average interest rate pro-forma to below 2.0%.

"The early refinancing of our financial liabilities due in 2022 with the new unsecured corporate bond is part of our 'REALize Potential'-strategy and another strategic milestone on our path to an investment grade rating," comments Tim Brückner, CFO of DEMIRE. "We are significantly improving our financing profile and thereby reducing the average nominal financing costs by around 90 basis points, which will benefit our FFO (funds from operations) in particular and sustainably from 2020 onwards."

The internationally recognized rating agencies Standard & Poor's ("S&P") and Moody's rated DEMIRE "BB" and "Ba2", respectively, each with a stable outlook. The rating of the Notes is expected to be "BB+" from S&P and "Ba2" from Moody's.

The Notes have a denomination of EUR 100,000 each and will be listed on the Luxembourg Stock Exchange (Euro MTF Market). Morgan Stanley and Deutsche Bank acted as Joint Global Coordinators and Joint Bookrunners. J.P. Morgan acted as Joint Bookrunner and Commerzbank as Co-Lead Manager.
 

IMPORTANT NOTICE:

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, South Africa, Japan, or the United States of America (the "United States") or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein have not been and will not be registered under U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, absent such registration, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
 

Contact:
Michael Tegeder
Head of Investor Relations & Corporate Finance
DEMIRE Deutsche Mittelstand Real Estate AG
Telephone: +49 (0) 6103 372 49 44
Email: [email protected]

About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE Deutsche Mittelstand Real Estate AG has commercial real estate holdings in mid-sized cities and up-and-coming locations bordering German metropolitan areas. The Company's specific forte is its focus on these second-tier cities and on a range of assets that appeals to both internationally active and regionally rooted tenants. DEMIRE holds a portfolio with a combined lettable area of around 1 million sqm and a fair market value of more than EUR 1.4 billion today.

The portfolio focus on office, retail and logistics assets results in exactly the kind of risk/return structure that DEMIRE considers appropriate for the business line of commercial real estate. The Company puts a premium on long-term contracts with solvent tenants in anticipation of stable and sustainable rent revenues. DEMIRE has set itself the goal to keep optimising its corporate structure. To this end, it pursues an active property management approach, convinced that it is the best way to achieve economies of scale and portfolio optimisations.

DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are listed in the Prime Standard segment of the Frankfurt Stock Exchange.