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Financing

EXCLUDING SUBSCRIPTION RIGHTS FOR THE ISSUE OF CONVERTIBLE BONDS

Report of the Management Board of IMMOFINANZ AG on excluding subscription rights for the issue of convertible bonds, as authorised by the resolution adopted at the 22nd Annual General Meeting of IMMOFINANZ AG of 1 December 2015. Please find the details in the PDFs below:

Download: Report on excluding subscription rights for the issue of convertible bonds, 23 December 2016 (476,43 kB, PDF)
Download: Report on excluding subscription rights for the issue of convertible bonds, 20 April 2016 (136,45 kB, PDF)

Multi-stage refinancing

The first three quarters of 2017 brought important steps to further optimise IMMOFINANZ’s capital and financing structure. Two incentivised conversions reduced the outstanding nominal value of the convertible bond 2018 from
EUR 507.1 million to roughly EUR 32.8 million and increased equity by EUR 254.9 million.

In January 2017 an invitation was issued to all holders of the convertible bond 2018 (ISIN XS0592528870) for an incentivised conversion into the underlying IMMOFINANZ and BUWOG shares together with a conversion premium. This offer led to the premature conversion of EUR 219.8 million, or 43.4%, of the outstanding certificates from the convertible bond 2018 and reduced the outstanding nominal value of this bond to EUR 287.3 million.

Parallel to this incentivised conversion, IMMOFINANZ issued a new convertible bond with a 2% coupon, a volume of EUR 297.2 million and a maturity date in 2024. The terms for the convertible bond 2024 (XS1551932046) give the bondholders a put option after five years (i.e. on 24 January 2022). The conversion price equalled EUR 2.2937* as of 30 September 2017 (original conversion price on the issue date: EUR 2.3933), which means the convertible bond 2024 currently entitles the bondholders to conversion into 129.6 million IMMOFINANZ shares. In addition, roughly 4.5 million BUWOG shares were placed on the capital market at the beginning of February 2017. The net proceeds from the transaction totalled EUR 97.4 million.

In September 2017 IMMOFINANZ issued another invitation to the holders of the convertible bond 2018 for an incentivised conversion into the underlying IMMOFINANZ and BUWOG shares together with a conversion premium. The offer covered the conversion of each bond certificate at the nominal value of EUR 4.12 into 1.241 IMMOFINANZ shares and 0.0653 BUWOG shares plus a conversion premium of EUR 0.206 for each outstanding bond certificate. This offer was accepted by 88.6% (EUR 254.4 million) of the bondholders. The transaction reduced the outstanding nominal value of the convertible bond 2018 to approximately EUR 32.8 million. IMMOFINANZ used roughly 13.1 million treasury shares and a further 63.6 million new shares from conditional capital to service the conversion rights. The settlement of the offer took place on 2 October 2017, i.e. after the end of reporting period. This transaction reduced IMMOFINANZ’s investment in BUWOG to 0.7 million shares.


* The settlement of the legal proceedings to review the exchange ratio applied to the merger of IMMOEAST and IMMOFINANZ and the payment of the EUR 0.06 dividend per share, both in the second quarter of 2017, led to an adjustment of the conversion price for the convertible bond 2024.

Financial liabilities

Financial liabilities, excluding the discontinued operation Russia, totalled EUR 2.7 billion as of 30 June 2017
(31 December 2016: EUR 2.8 billion). Cash and cash equivalents amounted to EUR 316.7 million incl. cash and cash equivalents from IFRS 5 (31 December 2016: EUR 193.4 million). Net debt, i.e. debt after the deduction of cash and cash equivalents held by the Group, equalled EUR 2.4 billion (31 December 2016: EUR 2.6 billion). Financial liabilities attributable to the discontinued operation Russia amounted to EUR 674.7 million as of 30 June 2017 (31 December 2016: EUR 721.7 million).

IMMOFINANZ has a robust balance sheet structure with an equity ratio of 39.9% (31 December 2016: 37.8%) and a net loan-to-value ratio (net LTV) of 46.0%, respectively 49.5% including Russia (31 December 2016: 49.0%, incl. Russia 52.2%).

The net LTV shows the carrying amount of financing less cash and cash equivalents in relation to the total carrying amount of the properties, the market value of the investment in BUWOG shares and the EPRA net asset value (EPRA NAV) of the investment in CA Immobilien Anlagen AG (CA Immo).

FINANCING COSTS

The average financing costs for IMMOFINANZ equalled 3.62% per year as of 30 September 2017 (31 December 2016: 4.01% per year) including the derivatives used for interest rate hedging and 3.37% per year excluding derivatives
(31 December 2016: 3.71% per year). After an adjustment for the financing arranged in Russia, the average financing costs equalled 2.56% per year (31 December 2016: 3.02% per year) including the derivatives used for interest rate hedging and 2.25% per year excluding derivatives (31 December 2016: 2.64% per year).

The average financing costs for the standing investments (excl. Russia) amount to 2.63% per year including derivatives and 2.11% per year excluding derivatives.

UNENCUMBERED PROPERTY

In addition to properties which carry external financing and/or are encumbered through standard market collateral (e.g. mortgages, pledge of company shares), EUR 676.8 million or 12.29% of the total property carrying amount was not externally financed and therefore unencumbered as of 31 October 2016. In addition to properties which carry external financing and are encumbered through standard market collateral (e.g. mortgages, pledge of company shares),
EUR 606.4 million or 11.51% of the total property carrying amount was not externally financed and therefore unencumbered as of 30 September 2017 (31 December 2016: 15.2%). The unencumbered standing investments have a combined carrying amount of EUR 312.4 million or 8.77%.

COMPOSITION OF FINANCIAL LIABILITIES

The financial liabilities held by IMMOFINANZ consist of amounts due to financial institutions as well as liabilities from convertible and corporate bonds. The composition of these liabilities as of 30 September 2017 is shown below:

Download: Financial liabilities of 30 September 2017 (154,15 kB, XLSX)

The remaining balance of the financial liabilities held by IMMOFINANZ (continuing operations) totalled EUR 2,705.3 million as of 30 September 2017. As of that date, all of the financing was denominated in Euros.
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