Czech Property Investments (CPI) places new bonds on the market through J&T Banka

Through today’s issue of Czech koruna bonds (CZK bonds), real estate company Czech Property Investments a.s. (CPI) is bringing to fruition the changes to its CZK 4 billion financing structure. Today, through J&T BANKA, it is placing on the market a CZK two billion issue with a seven-year maturity, which follows last week’s seven-year and thirty-year bond issues worth 70 and 10 million Euros, respectively.  

The CZK bonds, with a face value of CZK 1, bear variable interest income set under the interest rate of 6m PRIBOR +65% p.a. The Eurobonds with a face value of EUR 500 bear interest with the same margin in the amount of CZK 6.5% over 6M EURIBOR. All three new issues are listed on the Prague Stock Exchange.

“The funds from the bond issue will be used to develop current projects and, in part, to refinance short-term payables. This is an alternative to bank financing. In our view, it is important to diversify not only the structure of the company’s portfolio and activities, but also its sources of financing,” says Zdeněk Havelka, CEO of Czech Property Investments.

The interest income of all new CPI bonds is payable semi-annually in March and September of the respective year. The interest rate for the first yield period up until September of this year is set at 8.02% p.a. for the CZK bonds and 7.63% for the Eurobonds. Under current legislation, the CZK 1 face value of the CZK bonds effectively exempts Czech natural persons from withholding tax on interest.

“The new CPI bonds represent an attractive opportunity, tying together the financing of a diversified portfolio of Czech and Slovak real estate to interesting interest appreciation. If CPI achieves its strategic and financial targets, it can be expected that any future bond issues will offer low returns than today,” says Daniel Drahotský, Director of Financial Markets Department of J&T Banka.

J&T IB and Capital Markets arranged the bond issue for Czech Property Investments, a.s. The principal manager and administrator of the issue is J&T BANKA, a.s., which is organising the subscription and trading of the bonds. 

CPI is a leading Czech real estate company involved in real estate development, investment and management. It has twenty years’ experience in the real estate field. Its activities in the Czech and Slovak Republic span all segments. CPI invested CZK 16 billion last year alone in the purchase of real estate such as the Olympia Centres in Mladá Boleslav and Teplice, the Family Center portfolio in the Czech and Slovak Republics, the Lozorno logistics park near Bratislava, and the PPF office portfolio, to name a few. Accompanying its acquisition efforts are its own developments in the Czech Republic and Slovakia, which currently include the construction of retail parks, reconstruction of regional hotels in České Budějovice, Olomouc and Ostrava, and the construction of the CPI City Center office complex in Olomouc.