"Following successful sales of building rights, we continue our efforts to strengthen the balance sheet and we are very pleased to attract a leading international institution to invest in our hybrid bonds. By this issue we get access to attractively priced equity as a result of a reasonably priced coupon on the bonds and sensible conditions on the warrants, says Ilija Batljan, CEO and Founder of SBB.

The hybrid bonds initial issue amounts to MSEK 300 with a coupon of 7.5% per annum within a maximum frame of MSEK 1,000. The bonds are perpetual with a first possible call, from the company, after 5.5 years. The hybrid bonds are subordinated to the Company’s outstanding senior unsecured bonds and is expected to be counted as equity by credit providers and rating agencies.

Subscriber to the subordinated unsecured hybrid bonds is Phoenix Insurance Company, a leading insurance company.

The board of directors of SBB has also resolved, pursuant to the authority granted by the annual general meeting of shareholders held on 27 April 2017, to issue 35,000,000 warrants. With deviation from the shareholders’ pre-emptive rights, the subscribers to the subordinated unsecured hybrid bonds shall be entitled to receive the warrants free of charge.

Each warrant entitles to subscription of one ordinary share of Class B in Samhällsbyggnadsbolaget during the period from and including the date on which the issue of warrants is registered with the Swedish Companies Registration Office up to and including the day five years thereafter, at an exercise price of SEK 7.40. If the warrants are exercised in full, the Company will receive MSEK 259 and the share capital will increase by MSEK 3.5, corresponding to a dilution, based upon the number of outstanding shares as of today, of approximately 4.5 percent of the share capital and approximately 1.3 percent of the votes in the Company.

"Applying for an investment grade rating from one of the leading credit rating agencies is a natural step for SBB and a rating would provide yet another seal of approval for our business", says Ilija Batljan, CEO and Founder of SBB.

Since earlier, SBB has the following financial targets:

• to generate growth in net asset value per ordinary share, excluding dividends on ordinary shares, averaging at least 12% per annum over a five year period,
• to generate income from the sale of building rights averaging MSEK 250 to 400 per annum,
• to maintain a net LTV below 65%,
• to maintain a secured net LTV below 55%, from the second half of 2018 onwards,
• to maintain an equity ratio of at least 30%
• to maintain an interest coverage ratio of at least 1.5 times
• to as long-term target distribute dividends corresponding to 40% of earnings available for distribution (including dividends on preference shares)

Advisers:

ABG Sundal Collier AB has acted as financial adviser and Advokatfirman Vinge has acted as legal adviser in connection with the issue.