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BUWOG AG: Refinancing of convertible bond and improvement of Recurring FFO profile

DGAP-News: BUWOG AG / Key word(s): Bond/Financing
BUWOG AG: Refinancing of convertible bond and improvement of Recurring
FFO profile

19.12.2014 / 08:27

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BUWOG AG concludes refinancing of its 2019 convertible bond:

- Mortgage loans of EUR 330 million and average interest rate of around
1.8% on an average weighted term of 25.5 years signed with two leading
Austrian banks

- Call option exercised on 2019 convertible bond with volume of EUR 260
million and coupon of 3.5%

- Rise in Recurring FFO of more than EUR 3.0 million p.a. expected

- Average interest rate of around 2.4% on total loan portfolio with
average remaining term of around 17 years

Vienna, 19 December 2014. After signing mortgage loan agreements with two
leading Austrian banks with a total volume of EUR 330.0 million, BUWOG AG
will repay its 2019 convertible bond (ISIN AT0000A17CA5) by exercising its
hard call option in accordance with the terms and conditions of the bond at
101% of its nominal value of EUR 260 million, effective 19 January 2015.

The mortgage loans have an average weighted nominal interest rate of around
1.8%. Compared to the financing with the existing convertible bond, this
marks an interest advantage of approximately 1.7%-points after average
weighted interest hedging of the mortgage loans at 72.7%. One-time costs of
EUR 4.9 million will be incurred in the current financial year in
connection with the registration of the underlying collateral and
processing.

"The current interest environment allows us to refinance the convertible
bond at low cost with mortgage loans. Thus, we achieve a significant
improvement of our Recurring FFO. The financing structure of BUWOG AG
remains extremely conservative and this method of replacing the convertible
bond is the best solution for our shareholders as there will be no dilution
effects," said CFO Ronald Roos.

The average weighted term of the new mortgage loans is 25.5 years. As a
result of this and after further interest rate hedges to be concluded
shortly, the average term of the financial liabilities of the BUWOG Group
will rise to around 17 years with an average interest rate for all
financial liabilities of the BUWOG Group of around 2.4%. The financing
structure of the BUWOG Group will then be approximately 86% hedged against
interest rate risks by way of fixed-interest agreements and interest rate
swaps.

After the replacement of the 2019 convertible bond, BUWOG AG is
anticipating a cash improvement in its financial result of more than EUR