LEG Immobilien SE successfully places EUR 500 million convertible bonds

LEG Immobilien SE (“LEG”) has successfully placed EUR 500 million in guaranteed senior unsecured convertible bonds, set to mature in 2030. The bonds, issued by LEG Properties B.V., a wholly-owned Dutch subsidiary of LEG, are guaranteed by LEG and will be convertible into approximately 4.3 million new and/or existing ordinary registered shares of the company. This represents about 5.7% of LEG’s current outstanding share capital. Shareholders’ pre-emptive rights were excluded in this issuance.

The proceeds from the bond issuance will be used primarily to refinance existing debt and for general corporate purposes. “With the successful placement of the new convertible bond, we have effectively covered all 2025 maturities on a pro-forma basis, secured attractive interest rates, and maintained flexibility within our financing structure at a time when real estate valuations seem to be bottoming out. Based on this placement, as well as the latest disposals, we expect our average interest cost to remain stable at a low level,” commented Dr. Kathrin Köhling, Chief Financial Officer of LEG.

The bonds will be issued at their principal amount with a coupon of 1.00% per annum, payable semi-annually. Unless converted, repaid, or canceled earlier, the bonds will mature on September 4, 2030, and will be redeemed at an accreted redemption amount of 106.34% of their principal value. The initial conversion price is set at EUR 117.4748, representing a 37.5% premium over the reference share price of EUR 85.4362, based on the volume-weighted average price on XETRA between the launch and pricing of the bonds. Taking into account the accreted redemption amount, the effective conversion price at maturity will be approximately EUR 124.92.

Settlement of the bonds is expected around September 4, 2024, with admission to trading on the Open Market segment (Freiverkehr) of the Frankfurt Stock Exchange anticipated shortly thereafter. The issuer retains the right to redeem the bonds at their accreted redemption amount, plus accrued interest, after September 25, 2028, if the value of the underlying shares equals or exceeds 130% of the prevailing accreted redemption amount over a specified period, or if 20% or less of the aggregate principal amount of the bonds remains outstanding.

The bonds were offered exclusively to institutional investors outside the United States through a private placement. LEG and the issuer have agreed to a 90-day lock-up period, subject to customary exemptions and a waiver by the Joint Global Coordinators.

BofA Securities Europe SA and HSBC Continental Europe acted as Joint Global Coordinators and Joint Bookrunners for the offering, alongside Barclays, BNP PARIBAS, Crédit Agricole Corporate and Investment Bank, and Goldman Sachs Bank Europe SE.