DGAP-News DIC Assets
DGAP-News: DIC Asset AG / Key word(s): Financing
14.12.2016 / 18:41
DIC Asset AG realises early refinancing of the Commercial Portfolio
– Roughly EUR 1 billion refinanced over seven-year term
– Substantial reduction of Commercial Portfolio financing costs to circa 1.7 percent and amortisation rate to around 1 percent
– Funds from operations (FFO) and cash flow boosted as of the
– FFO between EUR 55 and 60 million expected from 2017
– Sustainable long-term continuity of dividends secured
Frankfurt/Main, December 14th 2016. DIC Asset AG (WKN A1X3XX / ISIN DE000A1X3XX4) announced today the signing of a credit arrangement for EUR 960 million for the Commercial Portfolio. The new loan with an overall term of seven years will be used to prematurely repay the existing financing arrangements signed with several banks for the Commercial Portfolio. The new financing arrangement was underwritten by Deutsche Hypothekenbank AG (EUR 510 million) as joint lead manager as well as by Berlin Hyp AG (EUR 250 million) and HSH Nordbank AG (EUR 200 million). For Deutsche Hypothekenbank AG it is the largest financing transaction in their history. Within the framework of its business plan, the new credit arrangement gives DIC Asset AG a high degree of planning security and already takes into account the transaction volumes planned with regards to the continuous optimisation of the Commercial Portfolio in the years to come. Jörg H. Becker of Bögner, Hensel and Partners provided legal counsel to DIC Asset AG for the transaction.
Substantial reduction of financing costs down to circa 1.7 percent
The newly negotiated credit arrangement lowers the interest rate on the Commercial Portfolio’s bank loans to circa 1.7 percent, a drop of 170 basis points compared to the previous financing conditions. The amortisation rate additionally falls from around 3 percent to approximately 1 percent p.a. This puts DIC Asset AG at the head of its field of competitors. The existing financing arrangements are expected to be almost entirely repaid in January 2017. The premature repayment of the old debt will trigger certain one-off expenses not recognised in the FFO, including but not limited to the payment of early termination penalties of approximately EUR 59 million. For the 2016 financial year, DIC Asset AG therefore anticipates a one-time negative consolidated income after tax which will amount to approximately EUR 35 million. The company intends to disburse, as planned, an attractive dividend on the level of previous years for the 2016 financial year.
Increased FFO and cash flow as of the 2017 financial year
Closing these transactions will be instrumental in strengthening the future financial and earnings position of DIC Asset AG. The estimated cash flow will increase by up to circa EUR 40 million p.a. ceteris paribus in 2017. This includes anticipated interest expense savings of up to EUR 20 million per year. With the further planned development of the Commercial Portfolio and Fund Business divisions taken into account, the company projects FFO between EUR 55 million and EUR 60 million in the 2017 financial year.
“This financial transaction, which is quite significant for us, significantly strengthens our future profitability and the cash flow from our commercial real estate portfolio. The new financing structure and the funds it releases will enable us to expand the company’s planned growth and to accelerate it further in 2017,” said Sonja Wärntges, CFO at DIC Asset AG.
DIC Asset AG
DIC Asset AG
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|Company:||DIC Asset AG|
|Neue Mainzer Straße 20 * MainTor|
|60311 Frankfurt am Main|
|Phone:||+49 69 9454858-1221|
|Fax:||+49 69 9454858-9399|
|ISIN:||DE000A1X3XX4, DE000A1TNJ22, DE000A12T648|
|WKN:||A1X3XX, A1TNJ2, A12T64|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|End of News||DGAP News Service|