Swiss Prime Site places convertible loan in the amount of CHF 275 million

The real estate company, which is listed on the SIX Swiss Exchange and has an issuer rating of A3 from Moody's, has announced that the proceeds will be used to refinance an expiring convertible bond. In addition, the fresh funds are to be used for new real estate projects as part of SPS's Green Finance Framework. The exchangeable bond itself is reportedly not classified as a green bond.

The issue of a convertible loan to ELM B.V., a financing company held by a foundation - a so-called repackaging vehicle - based in the Netherlands, has provided Swiss Prime Site AG with fresh funds of around CHF 275 million. According to SPS, the repackaging vehicle was chosen in order to avoid double taxation for foreign investors and to be able to address a larger audience abroad. The unsubordinated, unsecured convertible loan is said to have a term until 2030. The bond is convertible into newly issued or existing registered shares of SPS, but can also be settled in cash or a combination of both, which is left to the discretion of SPS.

ELM in turn issued a 7-year exchangeable bond, which is collateralized by the convertible loan. The exchangeable bond was reportedly successfully placed with investors in and outside Switzerland. The pricing of both convertible loans took place as part of an accelerated bookbuilding process, Swiss Prime Site further announces. Due to broad investor demand, including from abroad, the issue was increased from the originally planned CHF 250 million to CHF 275 million. The issue was oversubscribed several times.

The convertible loans will reportedly bear interest at a fixed rate of 1.625% per annum, payable annually in arrears. The reference price, which corresponds to the volume-weighted average price of the shares on the SIX Swiss Exchange between the commencement and pricing of the offer on May 23, 2023, is CHF 77.42. The initial conversion price is CHF 85.16, which corresponds to a premium of ten percent to the reference price.

The issue of the convertible loan confirms the real estate company's choice of a "diversified and conservative financing profile", which includes a variety of financing instruments on the capital market. The issue also makes it possible to extend the average term of the "liabilities at attractive conditions", Swiss Prime Site emphasizes. (bw)