Catella AB (publ) issues new senior unsecured green bonds

Catella AB (publ) (“Catella” or the “Issuer”) has issued senior unsecured green bonds in an amount of SEK 600 million at a floating interest rate of 3 months STIBOR plus 3.90% per cent under its medium term note programme, with a tenor of 3.5 years (the “New Green Bonds”). Catella intends to apply for admission to trading of the New Green Bonds on the sustainable bond list of Nasdaq Stockholm.

An amount corresponding to the proceeds of the New Green Bonds will be utilised in accordance with the Company’s green bond framework, including to finance the repurchase of the Existing Bonds under the Tender Offer (as defined below).

In connection with the announcement that Catella contemplated an issue of the New Green Bonds, Catella has offered holders of the Issuer’s outstanding senior unsecured floating rate bonds with ISIN: SE0015660444 and with an outstanding nominal amount of SEK 1,250 million (the “Existing Bonds”) to tender (subject to a transaction cap) their Existing Bonds for purchase by the Issuer for cash (the “Tender Offer”) at a price of 100.95 per cent of the nominal amount, plus accrued and unpaid interest.

The Tender Offer expired at 12:00 CET on 29 August 2024. Settlement of the Tender Offer is expected to occur on or about 6 September 2024. The full terms and conditions for the Tender Offer are available in the tender information document, which is available in the following link: www.catella.com/bonds.

DNB Bank ASA, filial Sverige, and Nordea Bank Abp have acted as joint arrangers and bookrunners in connection with the issuance of the New Green Bonds and as dealer managers and tender agents for the Tender Offer. Advokatfirman Cederquist KB has acted as legal counsel.

For further information, please contact:

Michel Fischier
CFO
+46-8-463 33 86
michel.fischier@catella.se

Johan Damne steps down after 35 years in the CA Group

Johan Damne has today informed the board that he wishes to resign as CEO of Claesson & Anderzén AB and chairman of the board of CA Fastigheter AB.

”- Although it is news, I have known about this for a long time, it is still with great sadness that I communicate that Johan has decided to leave CA. Johan’s outstanding ability to keep the group unified and execute big and small matters has been decisive for our success. During Johan’s years, we have grown from being a mainly local real estate company, to one, if not international, then at least an investment company with several international investments in a number of different industries. Together with the entire Claesson family and our employees, we thank Johan for this time and wish him all the best in the future”, says Johan Claesson, chairman of Claesson & Anderzén AB, in a comment.

”- The years go by and my decision to step down has grown recently. Having the privilege of leading a group like CA for a very long time is demanding and requires energy, power and new ideas. The timing of various decisions is always difficult, but I feel that the CA Group today is very well equipped for the future. All of our portfolio companies today have very competent organizations in combination with strong balance sheets, which is why it feels good to hand over the reins. Together with Claesson family and all my colleagues, I have been able to participate in developing the CA Group from the real estate crisis of the 90s to today, which has been both fun, challenging and stimulating. The loss of the CA group, all colleagues and partners will be great, but now I am looking forward to new challenges”, says Johan Damne in a comment.”

Johan will remain in all his functions until his successor is appointed. The recruitment of successors has already begun and is hoped to be completed during the autumn.

 

For questions, please contact Claesson & Anderzén AB’s chairman Johan Claesson, johan.claesson@claessonanderzen.com or 070-5471636.

or

Johan Damne, johan.damne@claessonanderzen.com or 070-5860330

Catella AB (publ) contemplates to issue new senior unsecured green bonds and announces tender offer regarding outstanding senior unsecured bonds

Catella AB (publ) (“Catella” or the “Issuer”) has mandated DNB Bank ASA, filial Sverige and Nordea Bank Abp as joint bookrunners to arrange investor meetings to investigate the possibility of issuing new SEK denominated senior unsecured green bonds with an expected volume of SEK 500 million under its medium term note programme, with an expected tenor of 3.5 years (the “New Green Bonds”). Subject to market conditions, a capital markets transaction may follow.

The proceeds from the potential transaction will be used in accordance with the newly established green bond framework and include financing or re-financing of eligible green projects related to green buildings, renewable energy, and energy efficiency.

In connection with the issue of New Green Bonds, Catella is offering holders of the Issuer’s outstanding senior unsecured floating rate bonds maturing on 17 March 2025 with an outstanding nominal amount of SEK 1,250 million (ISIN: SE0015660444) (the “Existing Bonds”) to tender (subject to a transaction cap) their Existing Bonds for purchase by the Issuer for cash (the “Tender Offer”) at a price of 100.95 per cent of the nominal amount, plus accrued and unpaid interest. The Existing Bonds will be repurchased subject to the terms and conditions described in a tender information document dated 26 August 2024 (the “Tender Information Document”).

The full terms and conditions of the Tender Offer can be found in the Tender Information Document, which is available in the following link: www. catella.com/bonds
The Tender Offer expires at 12:00 CET on 29 August 2024, unless extended, re-opened, withdrawn or terminated at the sole discretion of the Issuer. Settlement of the Tender Offer is expected to occur at or around 5 September 2024. The Issuer’s repurchase of Existing Bonds is conditional upon a successful issue of New Green Bonds and the conditions set forth in the Tender Information Document.

Holders of Existing Bonds who accept the Tender Offer will be eligible to receive a priority in the allocation of the New Green Bonds, subject to the terms set out in the Tender Information Document.

The Issuer has mandated DNB Bank ASA, filial Sverige, and Nordea Bank Abp as joint arrangers and bookrunners in respect of the issuance of the New Green Bonds, structuring advisors for the green bond framework and as dealer managers and tender agents for the Tender Offer. Advokatfirman Cederquist KB has been appointed as legal counsel.

For more information, please contact:
Michel Fischer
CFO
+46-8-463 33 86
michel.fischier@catella.se

For further information, please contact:

Michel Fischier
CFO
+46-8-463 33 86
michel.fischier@catella.se

Continued focus on increasing efficiency and growth

In a market that remains hesitant, we consistently strive to increase efficiency and digitalize operations to ensure we are well-positioned once the market begins to recover. Capital inflows and outflows in the core property funds remain limited, the latter we consider a sign of strength in the challenging market conditions. The Asset Management business delivered AUM growth from managing and developing property portfolios and repositioning assets to meet current market demands. This is evidence that our business model creates growth opportunities even in a weaker and more cautious transaction market, while we are also introducing new strategies to meet the investor demand of tomorrow.

The property transaction market remained hesitant in the second quarter. While inflation expectations continued to fall, central banks are generally cautious about interest rate cuts. In addition, elections were held in two of Europe’s largest economies and the Olympic Games were staged in Paris, which further slowed activity in our largest markets.
The value of European property assets has continuously fallen over the past seven quarters. However, the decrease in the last quarter was the lowest since the price correction began in the third quarter of 2022. With a touch of optimism, this can be interpreted as indicating that the market is slowly returning to levels where seller and buyer expectations will soon meet.

For Catella, we note that capital inflows and outflows in the core property funds business remain limited. We consider the latter a sign of strength in the currently challenging market conditions.
The Asset Management business delivered AUM growth from managing and developing property portfolios and repositioning assets to meet current market demands. This is evidence that our business model continues to generate growth opportunities even in a weaker and more hesitant transaction market.

Operating profit for the quarter was SEK 35 M, down SEK 53 M, mainly driven by significantly lower variable income in Investment Management (SEK -99 M) in year-on-year terms. In the quarter, we divested half our stake in asset management company CatWave to Söderberg och Partners, which already held 51 per cent in the company. The divestment had a positive effect on the profit of SEK 18 M, and in 2025 the remaining share of the operations are expected to be divested in 2025.
On the cost side, our initiatives aimed at increasing efficiency and digitalizing operations continue to yield positive results compared to the previous year, with costs down by SEK 55 M.

As part of our sustainability work, we published our first Principal Adverse Impact (PAI) report in the quarter. We consider it important to follow the EU regulatory framework for sustainable finance and to maintain a responsible investment strategy. In the quarter we also completed the United Nations Principles for Responsible Investment reporting (UNPRI) for the second year running. By being part of UNPRI we demonstrate that we maintain a responsible attitude and transparency towards investors and other stakeholders. As a further step on our sustainability journey, we are preparing for a green framework to enable the issuance of green bonds in the future.

Larger and more efficient fund platform
In order to take another step towards a stronger, more efficient, and larger fund platform in Investment Management, we communicated the merger of our two fund companies – Catella Residential Investment Management (CRIM) and Catella Real Estate AG (CREAG) in the quarter. CRIM’s focus is a fund offering aimed at European residential properties, while CREAG’s focus is commercial properties. By merging the front office in the new Catella Investment Management GmbH we are creating a more efficient function for capital raising, more coordinated investor relations, and stronger management and research operations. At the same time, CREAG can focus exclusively on cost-efficient growth, and on offering fund administration to Catella and external operators.
As previously mentioned, we have now actively started to raise capital for our new product strategy “European Living Development”. The strategy satisfies the extensive structural supply shortage of modern, sustainable and affordable housing in different segments. Supported by AI tools that identify attractive areas for investment projects and a higher return profile, it meets the investor demand of tomorrow. While the initial feedback from investors has been positive, both in terms of the strategy and pipeline, one must be humble by the fact that capital raising for new strategies takes longer in today’s market.

Assets under management in Investment Management totalled SEK 153 Bn in the quarter, which represents an increase of SEK 1 Bn in the previous quarter. As mentioned, growth is mainly derived from Asset Management and primarily Finland, where we signed several major mandates in the quarter.

Continued focus on completion
In Principal Investments, the focus remains on development and completion of existing projects for sale.
Our Kaktus investment project now has all lease agreements in place and we continue to look for the right buyer for the property.
Looking ahead, we are reviewing several potential investments, both in development projects where land prices have reached levels that support our return requirements and more European aggregation mandates with capital partners. With valuations that are now appearing to stabilize at a new level, we are seeing attractive investment opportunities.

Weak transaction market continued in second quarter
Although transaction volumes in Europe increased slightly on the previous quarter (+7 percent), volumes remained down by -59 percent compared to 2022, when the downturn started. We noted some increase in Corporate Finance activity in northern Europe, where a large degree of price corrections have already materialized. In southern Europe, and particularly in France, transaction volumes have been extremely low, driven by slower revaluation, political uncertainty and a challenging financing market.
In the second half of the year, we expect to see more deals completed in our pipeline.

Outlook
It is still too early to say that we have hit the bottom, but based on the dialogues we are having with investors, interest in investing in properties as an asset class is gradually increasing once again.
We have completed and are completing the necessary initiatives to increase efficiency and digitalize our operations. Some will take effect as early as this year, while others will contribute towards strengthening Catella’s growth and profitability when the market begins to recover.

Catella presents the Interim Report and answers questions today at 10 a.m. CET.
To participate, go to https://financialhearings.com/event/48741

Christoffer Abramson, CEO and President
Stockholm, Sweden, 21 August 2024

For further information, please contact:

Michel Fischier
CFO
+46-8-463 33 86
michel.fischier@catella.se