EYEMAXX Real Estate AG

17.04.2018 - Equity Research Einzelstudie // Überdurchschnittlich attraktiv

Credit Research - EYEMAXX Real Estate AG

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Unternehmen: EYEMAXX Real Estate AG
Branche: Immobilien
Rating: Überdurchschnittlich attraktiv
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 4;5a;6a;10;11

Issue of the sixth corporate bond planned to finance further projects; two bonds already repaid; company has an extensive; Project pipeline of more than € 750 million

EYEMAXX is currently in the issuance phase of a 5.5% corporate bond with a volume of up to € 30 million. In parallel, the company is offering the holders of the already issued 7.875% corporate bond (outstanding volume: € 8.66 million) to exchange their bond holdings so that, if fully accepted, the issue proceeds could amount to up to € 21.34 million. We have benchmarked the planned corporate bond with the market and awarded the rating "Well above average".

With the new bond funds, EYEMAXX plans to primarily finance new projects. Large-scale residential property projects as well as mixed-use projects have already been identified, for which the financing of subordinate funds for the purchase of real estate still has to be raised. Around € 12.0 million should be used to purchase the land. In addition, a further € 15.0 million could be used for the further expansion of the project pipeline.

The project financing takes place at the level of the respective project company. The equity of the project company amounts to 15-30% of the total investment, of which EYEMAXX can raise both equity and debt at the level of the parent company. Based on these investment data, the projected investment in identified projects amounting to € 12.0 million will boost a project scope of up to € 80 million. This would significantly increase the existing and already extensive project pipeline of € 757.7 million.

On the basis of the planned investments and the projects that are already acquired, we expect a further increase in total output, which should establish itself well above a level of € 26.00 million. At the same time, we expect that the group’s high profitability continues, with EBIT margins of more than 60%. Although the issue of the new € 30.0 million corporate bond is expected to result in an increase in interest expenses, this increase could be disproportionately lower if there is a high acceptance rate for the exchange offer. In addition, the complete placement of the 5.5% coupon corporate bond should further reduce average interest rate. The three outstanding corporate bonds all have a coupon of more than 7.0% each.

This should have a positive impact on credit metrics, which are important for bond creditors. In the past fiscal years the EBITDA as well as the EBIT interest cover ratio had stabilized at a level between 1.5 and 1.8. We expect a significant improvement in the interest coverage ratio to over 2.5 (2019/2020e). The positive earning after-tax results and the expected conversion of the outstanding convertible bonds, amounting to € 24.57 million, should also lead to a significant increase in the equity ratio to over 50% in the coming fiscal years.

The 5.5% corporate bond offered for subscription from 26/04/2018 is classified as "Well above average" according to our market benchmark and including the Creditreform rating (BB). We therefore award 4 out of 5 GBC Falcons.


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