EQS-Adhoc ​​​​​​​Grand City Properties S.A. decides not to exercise its option to voluntarily call EUR 200 million 2.75% Perpetual Notes with call date in January 2023

Grand City Properties S.A. decides not to exercise its option to voluntarily call EUR 200 million 2.75% Perpetual Notes with call date in January 2023

Luxembourg, 29 November 2022 - The board of directors (the “Board”) of Grand City Properties S.A. (the “Company” or “GCP”) has decided today not to exercise the option to voluntarily redeem the EUR 200 million 2.75% undated subordinated notes subject to interest rate reset with a first call date on 22 January 2023 (ISIN XS1491364953) (“Perpetuals”) on such first call date. As stipulated in the terms and conditions of the Perpetuals, the coupon for the new interest period starting from 22 January 2023 will be the five-year swap rate plus a margin of 3.637% per annum. A potential option to defer the coupon payments will be considered closer to the respective interest payment date. Going forward, the Company will have the option to voluntarily redeem the Perpetuals at every future interest payment date.

The decision is based on economic considerations and reflects the current market conditions. Because financing rates currently available for issues of new perpetual notes are significantly less favorable than the step-up rate provided for in the terms and conditions of the Perpetuals, a potential replacement of the Perpetuals with new perpetual notes is economically not feasible. The decision is in line with GCP’s strategy to preserve cash, maintain low LTV-ratio and high headroom to its debt covenants in the current volatile market environment. The Perpetuals will continue to be accounted as equity under IFRS accounting and for the calculation of financial covenants of GCP’s senior bonds. The Company does not expect its credit rating of BBB+ from S&P to be negatively impacted due to this decision and remains committed to retain perpetual notes as part of its long-term financial structure. The Company will evaluate potential call options under its other perpetual notes closer to their respective optional call dates considering then prevailing market conditions.