Hungarian resi developer Cordia raises €135m via oversubscribed bond issue

Hungarian residential developer Cordia said on Thursday that it has issued its first bonds on the Budapest stock exchange to finance its expansion plans in CEE.

Cordia, part of the Futureal group, raised HUF 44.4 bn (€135 mln) in its debut transaction which was heavily oversubscribed by financial institutions. The seven-year bond carries an annual coupon of 4% and reflects an average yield of 3.82%.
 
The company intends to use the proceeds to expand both by acquiring new plots and also by purchasing other development companies.

'The company started preparing to enter the capital markets already in late 2017 to finance its development plans in CEE. Eventually we have decided to enter the corporate bond market in Hungary first and joined the programme initiated by Hungarian National Bank intended to build the local bond market, which attracted also dozens of local and international financial institutions,' commented Tomasz Lapinski, member of the Management Board of Cordia International and Chief Financial Officer of the Cordia Group.

As part of the programme, a certain amount of bonds is purchased by the central bank — provided that the issuer places at least the same amount of securities among other commercial investors.

Cordia operates in three main markets, i.e. Hungary, Poland and Romania. The company has also recently invested also in the very first pilot project in Spain. Its portfolio of secured plots and projects includes over 4100 units in sales & construction as well as over 5200 units in the land bank.

'The bond issue we have just completed will allow us to extent it substantially investing into projects and companies in the markets where we are already present – mainly in Poland – but also searching for other opportunities. Due to our diversification we have much broader and better perspective,' added Lapinski.

'As far as Poland is concerned, we have just commenced a new project Horyzont Praga in Warsaw and we are about to open also new attractive residential buildings in Tricity, namely in Gdansk and in Sopot as well as in Kraków. We plan to enter also Poznan and Wroclaw. We screen all our markets for new opportunities,' commented Michal Melaniuk, head of residential development Poland.

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