Gewobag is the first municipal housing company to establish a €500 million commercial paper programme
As a municipal company with its own legal form, Gewobag is a pioneer in establishing a Commercial Paper Programme. The structuring and launch of the Commercial Paper Programme was the result of a collaboration between Gewobag and Lincap.
The CP Programme forms the basis for the issue of bearer bonds with a term of up to 364 days. It is used for general corporate purposes, and the possibility of interim financing of investment and acquisition measures in addition to working capital financing. The transaction is arranged by Commerzbank. The dealers are BayernLB, Commerzbank, DZ Bank, HSBC and ING Bank.
The collaboration between Lincap and Gewobag extends from evaluating the programme and exploratory talks with potential arrangers to the review and negotiation of the documentation.
Markus Terboven, Gewobag Board Member:
“In establishing the CP Programme, Gewobag is breaking new ground in financing, and thus continues to pursue an innovative financing strategy. We introduced this strategy some years ago by obtaining external credit ratings and issuing various Schuldscheine. This was triggered by the largest investment programme in Gewobag’s 100-year history: the next few years will see investments in the amount of approximately €3.6 billion, which will also mean a greater requirement for interim and advance financing. This is the purpose of the CP programme that has now been introduced, and which will enable funds to be raised at very short notice.”
Jan-Willem Lindhout, Managing Director Lincap:
“We are very proud to have been able to support Gewobag in what is a highly innovative route to financing for a municipal company. Launching the CP programme gives the company exceptional access to short-term financing in a volume which would not generally be cost-effectively available to municipal property owners. Gewobag is thus optimising its financing basis for the cost-efficient and flexible implementation of its extensive investment programme. The successful establishment of the Commercial Paper Programme also reflects the company’s excellent credit profile in the capital market.”