The inaugural euro-dominated hybrid bond from pan-European residential real estate company Heimstaden has ignited significant interest from institutional investors.
Generating a total of €300 mln, the subordinated perpetual bond has an initial reset of 5.25 years, and carries an annual fixed-rate coupon of 6.750% and a yield of 6.875%.
The bond will be accounted for as 100% equity by Heimstaden in accordance with international financial reporting standards. Fitch is expected to classify the bond as having 50% equity content and to assign a ‘BB-’ rating to the issue.
The offering attracted strong interest from a broad institutional base with a book of more than two times the notional amount at final price.
Heimstaden said that proceeds from the bond will be used for general corporate purposes and to reduce the commitments under the company's bridge financing facility. An application will be made for the bond to be listed on Nasdaq Stockholm.
Artic Securities, Citigroup, Nordea, JP Morgan and Swedbank acted as Joint Bookrunners for the issue.