- Neinor’s bond issuance saw strong investor demand
upsizing it to €325mn while also improving Neinor’s overall
corporate cost of debt to 5.875% (from 6.5%) and extending
maturities to 5.25 years (from 2 years)
- The use of proceeds is mainly focused on the
refinancing of the existing corporate debt (€175mn) and the
remaining proceeds (€150mn) will be allocated to growth
opportunities
- Even after the upsizing and cost optimization,
investors demand has largely surpassed the offer size being in
excess of €1,300mn and 4x oversubscribed
MADRID, October 31, 2024 -
Neinor Homes ("Neinor"; HOME SM), the leading listed residential
property developer in Spain, has successfully completed its second
bond issuance, upsizing the initial targeted amount to 325 million
euros, with 5.25 years maturity (2030) and a cost of 5.875%,
excluding Neinor’s interest rate cap – even so, this entails an
improvement on Neinor’s overall cost of debt of 62.5bps. Moreover,
the bond has received a BB- rating by Fitch and Standard &
Poor’s, while the corporate rating was B+.
These ratings illustrate a positive outlook for
housing demand in the Spanish market underpinned by the strength of
the economy and improving affordability. According to Bloomberg
consensus, the Spanish economy is expected to grow by 2.8% and
2.1%, clearly outperforming the broader Euro Zone whose growth is
expected to reach 0.7% and 1.2%, respectively (source: BBG
consensus).
One of the key strengths highlighted by the
rating agencies was the visibility over the upcoming years due to
its solid orderbook with 1,761 housing units pre-sold worth more
than 600 million euros in future revenues (Jun-24).
The increase in corporate debt and
maturity extension is justified by the focus on growth
opportunities
As explained earlier this week, the company
intends to allocate 175 million euros to repay its existing
corporate debt facilities. Furthermore, Neinor is looking to
increase its corporate debt by an additional 150 million euros, to
fund new growth opportunities that may arise in the future, either
through Neinor’s own acquisition programme or the partnerships with
its co-investors where it has up to 400 million euros remaining to
be deployed.
As of Jun-24 and adjusted by the 75 million
euros dividend payments executed, Neinor has a prudent
loan-to-value (LTV) of 19%. Furthermore, through this issuance the
company will also extend its debt maturities from approximately two
years (2026-27) to five years and a half (2030) enhancing cash flow
generation in the coming years.
A successful placement 4x oversubscribed showcasing
Neinor’s execution track record
The bond was well received by investors, being
4x oversubscribed reflecting a clear use of proceeds that is growth
oriented in a highly supportive macroeconomic backdrop where there
is a structural shortage of housing supply.
Neinor pledges to invest 100% of the net
proceeds on green projects
The company has issued its second Green Bond and
has pledged that it will invest an amount equivalent to 100% of the
proceeds in Eligible Green Projects as defined in its updated 2024
Sustainable Financing Framework. These projects will be fully
aligned with the Substantial Contribution Criteria of the European
Taxonomy for Green Buildings – new construction activity and will
contribute to the Sustainable Development Goals (SDG), thereby
fostering sustainability through a reduction of the carbon
footprint of the buildings during the construction phase and
best-in-class energy efficiency standards to lower life-cycle
emissions. Moreover, some of the projects will also fulfil social
goals by increasing supply both for rental and for sale in a market
where there is a structural housing deficit, namely on affordable
and social housing.
Borja García-Egotxeaga,
CEO of Neinor Homes, commented: “We are very pleased with
the outcome of this issuance where institutional investors have,
once again, backed up the company reflecting the trust on our
execution capacity, financial discipline and vision to anticipate
investment cycles in the Spanish residential market.
In the last 18-months we have shown precisely
this by divesting €275mn in BTR assets to core capital, raised and
deployed €800mn equity with opportunistic investors and now raised
nearly €500mn corporate debt from local banks and institutional
investors – these different pools of capital have directly or
indirectly supported Neinor’s capital market strategy delivering
+60% total return YTD to our shareholders.”
Jordi Argemí, Deputy CEO and CFO,
stated: “We are thrilled with the strong investor demand
witnessed on this issuance, which reinforces the confidence on the
management team and has allowed the company to improve the quality
of its corporate debt with a lower cost and extending maturities.
Furthermore, this issuance will play a critical role in the
execution of Neinor’s strategic plan as it will allow us to
continue to accelerate execution on equity efficient growth and
shareholder remuneration.”
* For the full regulatory announcement please refer to Neinor’s
webpage
(https://www.neinorhomes.com/en/accionistas-inversores/regulatory-announcements)
-ENDS-
About Neinor Homes
Neinor Homes is the leading residential property
developer in Spain, with a land bank to develop c12,000 homes, and
a GAV to June 2024 of €1.5bn. This land bank is located in some of
the fastest growing regions with the best economic fundamentals in
Spain: Madrid, Western and Eastern Andalusia, Levante, Basque
Country and Catalonia.
Neinor is a fully integrated and
well-established residential platform of scale in Spain, covering
the entire development value chain from land buying, planning and
urban management, product design, delegated development and
construction, sales and marketing and rentals. We are committed to
creating and delivering attractive risk adjusted returns for
shareholders through our disciplined capital allocation strategy
and our excellence in operations and risk management.
We are the only listed residential property
developer with a multi-sector strategy to market in Spain, and our
strategies include Build-to-rent (BTR); Build-to-sell (BTS); and
the largely untapped senior living rental market in Spain, which we
are progressing.
Neinor’s operational excellence, investment
strategy and results achieved since 2019 have enabled us to deliver
on our 5-year business plan, launched in March 2023, in a
sustainable and capital-efficient manner. This plan combines a €600
million shareholder remuneration plan and an investment of €1
billion in new opportunistic land acquisitions, half of which are
expected to be undertaken in joint ventures with strategic partners
through co-investment agreements, with a +20% IRR target.
We offer shareholders attractive risk adjusted
returns in a country where there are strong and sustainable supply
and demand fundamentals and supported by a resilient macroeconomic
environment and outlook. Spain remains one the most attractive and
safest residential markets worldwide, with one of the lowest ratios
of new supply per capita globally since 2007.
For more information:
NEINOR HOMESInvestor Relations
Departmentinvestor.relations@neinorhomes.com
LLYCElena Torres Quilis -
etorresq@llyc.globalIrene Osuna Díez - iosuna@llyc.global+34 91 563
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