Citycon buys back some hybrid bonds due 2024 at discount

By Marisa Wong

Los Angeles, Nov. 30 – Citycon Oyj will repurchase €17.5 million of its 5.25-year subordinated fixed-to-reset rate non-call undated green capital securities issued in November 2019 (ISIN: XS2079413527), according to a press release late Tuesday evening.

The company will repurchase the 2024 hybrid bonds for an aggregate price of roughly €14.7 million. The repurchase price is about 84% of par, excluding accrued interest on the repurchased principal amount.

The company said it will issue up to 2,774,398 new shares to an institutional hybrid bondholder in deviation of the pre-emptive subscription rights of the shareholders in exchange for the company repurchasing some of the 2024 hybrid bonds.

Under the transaction, the subscription price for the shares payable by the investor to the company is set off against the repurchase price for the 2024 hybrid bonds payable by the company to the investor.

The main purpose of the transaction is to strengthen the company’s balance sheet and improve its capital structure in the current market environment. Additionally, the capital structure and balance sheet strengthening will also allow the company to maintain its investment-grade credit rating for the foreseeable future, the release noted.

The company said there are, therefore, weighty financial reasons for it to deviate from shareholders’ pre-emptive subscription rights.

Based in Helsinki, Finland, Citycon is an owner, manager and developer of mixed-use real estate in urban hubs.

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