TAG Immobilien to price €95 million seven-year convertibles to yield 4.5%-5.5%, up 20%-25%

By Susanna Moon

Chicago, June 25 - TAG Immobilien AG plans to issue about €95 million of seven-year unsubordinated unsecured convertible bonds at par to yield 4.5% to 5.5%, with a conversion premium of 20% to 25%.

The company will sell the bonds at par of €100,000 to institutional investors outside of the United States, according to a company press release.

The bonds are putable on the fifth anniversary after issue.

Pricing is slated for Monday, and the issue will settle on Thursday.

Proceeds will be used to repay the vendor loan resulting from the acquisition of DKB Immobilien AG, for future acquisitions and for general corporate purposes.

Deutsche Bank, Frankfurt am Main is the bookrunner. Close Brothers Seydler Bank AG, Frankfurt am Main and Kempen & Co NV, Amsterdam are the co-managers.

"This bond issue is an opportunistic move by TAG in what seems a very favourable financing environment to us and is intended to de-risk our balance sheet as well as to reduce future funding costs," the company's chief executive officer Rolf Elgeti said in the release.

"As the strike price is close to our NAV per share this issue is also protecting the interests of TAG shareholders. Growing the business remains an important part of our strategy but we will continue to make sure that our balance sheet remains healthy and that growth does not compromise the economic position of our existing shareholders."

The company's shares (ETR: TEG) closed at €7.75 on June 22.

TAG Immobilien is a Hamburg, Germany, property investment company.

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