The bond issue by Appeninn was successful in the scope of the Bond Funding for Growth Scheme of a total amount of HUF 300 billion started on 1 July 2019 by the Hungarian National Bank. The central bank and rated institutional investors registered 400 corporate bonds of a nominal value of HUF 50 million in the scope of the announced private auction, in accordance with the company’s preliminary fund raising plans. The maturity of the securities is 10 years, and repayment is to be made all at once at the end of the maturity. The total amount of funds raised is HUF 20.1 billion. The average yield is 3.44 percent.
The property company plans to spend the funds generated from the bond issue on the implementation of its growth and acquisition plans, and at the same time it can significantly decrease its money market risks by way of the fix interest. A further benefit of the bond issue is that it provides resources without property collateral.
Appeninn received the credit ratings necessary for the participation in the program on 1 October 2019 from Scope Ratings GmbH, registered by the European Securities and Markets Authority (ESMA). The company received a B+ rating, while its unsecured bonds received a BB- rating; amongst others, the international credit rating rated well the 97% exploitage of the company’s properties. The company’s Board of Directors was given authorisation from the general meeting on 5 November for the implementation of the bond issue.
According to Tamás Bernáth, the Chairman and CEO of Appeninn Plc., the successful implementation of the bond issue confirms trust in the company. The company’s growth strategy aims at establishing a portfolio, which includes properties of higher category by way of sales with beneficial market conditions, higher value and higher yield generating capability, increasing shareholder value. Due to the beneficial fix interest, and the long maturity, the Bond Funding for Growth Scheme provides excellent financing options to the company, nevertheless it also contributes to the decrease of its money market risks.