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Heimstaden Bostad AB yesterday successfully priced an issuance of a EUR 500 million subordinated perpetual hybrid bond (Capital Securities) with an annual fixed rate coupon of 3.375% and a non-call period of 5.5 years. The issue attracted strong interest and the book peaked at more than two times the nominal amount.

S&P will classify the hybrid as having intermediate equity content and has assigned a ‘BB’ rating to the issue. The proceeds will be accounted for as 100% equity according to IFRS and will be used for general corporate purposes, including new investments.

Commenting on the transaction, CFO Arve Regland said:
“We are pleased to see continued strong interest in Heimstaden Bostad from the capital markets. This latest issuance provides us with funds to execute on our strategy while maintaining a robust and balanced capital structure as we continue our journey towards a ‘BBB’ rating.”

An application will be made for the bond to be listed on Euronext Dublin. The final listing particulars, once published, will be made available on www.ise.ie and www.heimstadenbostad.com.

Danske Bank, Deutsche Bank, J.P. Morgan and Nordea acted as Joint Structuring Agents and Joint Bookrunners for the issue.