DEMIRE announces today the issue of a notice of redemption for its 2014/2019 corporate bond and the full repayment of expensive old liabilities
Langen, 21. September 2017 – DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) today announced the issue of a notice of redemption for its 2014/2019 corporate bond (ISIN: DE000A12T135). The funds used for the bond’s repayment stem from the successful placement of the unrated, unsecured 2017/2022 corporate bond in the amount of EUR 270 million with a 2.875 percent interest rate placed at substantially better conditions with institutional investors on 12 July 2017. The repayment of the redeemed 2014/2019 corporate bond is expected to take place on 21 November 2017 at 104 percent according to the bond’s terms and conditions. This re-demption marks DEMIRE’s full repayment of old liabilities, as planned, using the proceeds from the initial placement of the new 2017/2022 corporate bond.
As previously announced on 18 September, DEMIRE raised additional principal of EUR 130 million at 101.25 percent of par value (equivalent to a yield of c. 2.6 %) from its 2017/2022 corporate bond. Among others, proceeds are to be used to repay expensive old liabilities (A/B notes) in the fourth quarter whose average interest rate is 4.4 percent. With this repayment, DEMIRE will have achieved a significant reduction in its average financing costs under its DEMIRE 2.0 programme within only a few months. Average financing costs following the repayment are projected to drop from a recent 4.1 percent p.a. as of the 30 June 2017 report-ing date to 3.0 percent p.a. on a pro forma basis. In addition, operating cash flow is set to rise starting in 2018 as a result of the completion of refinancing in the amount of roughly EUR 18 million p.a.