Global law firm Baker & McKenzie advised SOZIALBAU Group on the issuance of a secured bond through its group company WOFIN Wohnungsfinanzierungs GmbH in accordance with the Trustees Act. Erste Group Bank AG acted as the lead manager and arranger of the issuance, which was listed for trading at the Third Market of the Vienna Stock Exchange on October 7, 2013.
The bond constitutes a senior real estate bond secured by mortgage at an issuance volume of EUR20 million, a coupon of 3 percent per annum and a term of 12 years. The Trustees Act required the appointment of a joint agent (trustee) to represent the bondholders, thus adding a special feature to the deal. The senior securing of the bondholders' claims on capital and interest provides considerable structural security for investors. Four developed real properties, which must not be sold during the bonds' term, serve as in rem securities. The issuance of the secured bonds was rated "AA+" by Creditreform.
Baker & McKenzie provided legal advice on the transactional aspects of the issuance. In this assignment, Baker & McKenzie’s focus was on structuring the transaction and securities documentation, coordinating with the joint agent of the bondholders as well as obtaining the approval of the Vienna Commercial Court for the appointment of the joint agent.
"SOZIALBAU Group is very well suited for the issuance of secured bonds. Firstly, the secured bond offers an attractive return and structural security for investors. Secondly, the rent to be paid by the lessees of the individual patronized real properties will be reduced as compared with a financing of the transaction through banks," commented Mag. Christoph Moser, attorney at Baker & McKenzie, who was in charge of the Baker team assisting in this transaction.
Established in 1954 and belonging to the Vienna Insurance Group (VIG), SOZIALBAU Group is Austria's largest private housing company, managing almost 48,000 apartments. As an operative business, SOZIALBAU AG services a cooperative association comprising the residential building cooperatives Familie, Volksbau and Wohnbau. In the fiscal year 2012, SOZIALBAU AG and the three cooperatives in the SOZIALBAU association showed a joined balance amount of EUR 2.5 billion in total.
Baker & McKenzie Vienna regularly advises loan capital and equity capital issuances - among others, the issuance of secured bonds worth EUR52.8 million of an enterprise of PEMA Group in July 2013 and the Debt Issuance Program 2012 as well as the resulting issuance of bonds of WEB Windenergie AG, a leading Austrian producer of renewable energies in spring 2013. Other transactions of recent time were the bond issuance program of voestalpine AG, the re-listing of Lenzing as well as the capital increase and IPO of DO&CO, an Istanbul-based catering and restaurant enterprise.
Legal advisors SOZIALBAU group:
Baker & McKenzie
Lead:
Capital markets law: Mag. Christoph Moser, (Attorney at law, Vienna)
Further attorneys involved:
Capital markets law: Dr. Philipp Spatz, LL.M. (Partner, Vienna)
Real Estate: Dr. Stephan Größ, LL.M. (Partner, Vienna)
