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Deutsche Wohnen improves its financing structure and cash flow profile with early refinancing

DGAP-News: Deutsche Wohnen improves its financing structure and cash flow profile with early refinancing

Deutsche Wohnen AG / Key word(s): Financing

06.10.2014 / 13:00

Deutsche Wohnen improves its financing structure and cash flow profile with early refinancing

- Loan agreements of EUR 710 million with Berlin Hyp and of EUR 650 million with
  Landesbank Hessen-Thüringen

- Total volume of financing transaction in the amount of EUR 1.76 billion

- Increase in free cash flow of around EUR 62 million p.a., of which around EUR 39
  million p.a. will have an effect on FFO as interest savings

- Average rate of interest in the Group will go down from 3.4% to 2.5% p.a. with an
  average remaining term of around 9 years

Frankfurt/Main and Berlin, 6 October 2014. The Deutsche Wohnen Group ("Deutsche Wohnen") has concluded financing agreements with Berlin Hyp and Landesbank Hessen-Thüringen ("Helaba") totalling EUR 1.36 billion. The payment of these loans for the purpose of refinancing existing loans is planned for the end of this year with the closing of the contracts. With these agreements Deutsche Wohnen is successfully concluding its EUR 1.76 billion financing transaction for improving its financing structure and cash flow profile. That process started at the beginning of September with the issue of a convertible bond in the amount of EUR 400 million.

Loans of EUR 710 million were agreed with Berlin Hyp and of EUR 650 million with Helaba. The loans have an average term of 8 years and no contractual amortizations. The interest rates were fixed at around 1.9% p.a. for approximately 70% of the nominal amount of the loans; the remaining 30% of the loans are at a variable interest rate based on the Euribor plus margin. Taking the convertible bond into consideration, this means an average interest rate of less than 1.5% p.a. for the EUR 1.76 billion total financing volume. Bank commission and other one-off structuring costs in the amount of around EUR 10 million are also being incurred by this refinancing. This corresponds to around 0.75% of the nominal amount of the new loans.

Andreas Segal, Chief Financial Officer of Deutsche Wohnen AG, explains: "With this successful financing transaction we have made use of what is currently an attractive financing environment and have achieved our goal of sustainably optimising our financing structure. The attractive terms are proof of the soundness of our business model and the high quality of our assets. Thereby, Deutsche Wohnen has positioned itself strongly in the market with regard to its key financing figures as well. In optimising our financing structure we made a conscious decision to conclude this refinancing with our long-standing partner banks."

During the term of the new loans this financing transaction will lead to an interest saving of around EUR 39 million per year. As a result, a significantly higher FFO is anticipated for Deutsche Wohnen from 2015 onwards. The total amount of contractual amortizations of the loans within the Group will be reduced by approximately EUR 23 million per year during the term of the new loans. Consequently the amount of free cash flow will increase by around EUR 62 million in total per year. For this reason the forecasts made at the time of the issue of the convertible bond at the beginning of September will be revised upwards once again. Within the context of the unwinding of existing interest rate hedges, interest payments on existing loans in the amount of EUR 100 million will be made prematurely in 2014.

With this financing transaction some key figures of the Group (pro forma as at 30 June 2014) will improve. The average term of the Group's loans will increase from around seven-and-a-half years to nine years. The average rate of interest will decrease from around 3.4% to around 2.5% p.a. The yearly rate of redemption will go down from around 1.6% to around 1.1%. The hedging ratio in the Group will now be around 85%.

Deutsche Wohnen

Deutsche Wohnen is one of the largest publicly listed residential property companies in Germany and Europe with a business focus on managing and developing its residential property portfolio. As at 30 June 2014 the portfolio comprised a total of 150,136 units, of which 148,035 are residential units and 2,101 commercial properties. In addition, the company operates around 2,200 nursing places/apartments in the business area of Nursing and Assisted Living. The company is listed in the Deutsche Börse's MDAX and is also included in the leading indices EPRA/NAREIT and GPR 100.

Phone +49 (0)30 897 86-5413
Fax +49 (0)30 897 86-5409

06.10.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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