Vonovia raises €1b in latest bond issue

Germany's largest residential property company Vonovia has secured €1 bn through a bond issue, tapping the bond market for the second time this year.

The issue was divided into two tranches of €500 mln, with a maturity of 10 and fifteen years respectively. The 10-year bond bears interesting at 0.5%, while the other tranche has a 1.125% coupon. According to Vonovia, the order book was three times oversubscribed.

In parallel with the new issue, the Dax-listed firm offered a buyback to the creditors of two bonds issued in 2015, which are set to mature this year. These bonds pay interest at 0.87% and 1.625% respectively.

Vonovia placed a bond with a volume of €500 mln in January of this year.

News of the latest bond issue came as Vonovia announced that it had issued its first ever promissory note via a digital platform.

In the scope of a private placement, an institutional investor provided debt of €50 mln with a maturity of seven years. Vonovia selected German online marketplace firstwire for its digital debut.

'Digitalisation is a megatrend and is therefore gaining importance in the financial sector as well,' said Helene von Roeder, chief financial officer of Vonovia.

'It was important to us that we place our first promissory note in the market independently and straightforwardly. With this transaction, we have expanded not only our range of financing instruments but also our investor base – with very attractive terms,' von Roeder added.

'We can well imagine issuing additional promissory notes of similar or even greater volumes,' concluded von Roeder, hinting at further diversification.

Michael Dreiner, CEO and founder of firstwire, said: 'We are delighted with this issuer and see this as a confirmation of our digital approach. In addition to larger mid-size companies, we can provide even experienced issuers in the DAX league access to institutional investors, in practically all maturities and risk categories.'

According to Vonovia, the firm's outstanding debt volume was €20.5 bn as of June 30.

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