ČMN real estate group to offer covered bonds to investors

ČMN real estate group to offer covered bonds to investors

The Czech National Bank has approved the summary prospectus of Českomoravská Projektová III’s bond issue programme with the aggregate principal amount of up to CZK 1.5 billion and a duration of 15 years. Českomoravská Projektová III is a member of the Českomoravská Nemovitostní (ČMN) real estate group.

The ČMN group will use the funds raised from the bond issue to finance its investments into commercial real estate. “The aggregate principal amount of CZK 1.5 billion is an upper limit. The number of particular issues and their volume will be determined by the projects we are going to implement and will be announced to investors and the Czech National Bank, as required by the regulator,” said Radek Stacha, Chairman of the Board, ČMN.

All bonds issued under this programme will be now covered by the Českomoravská Nemovitostní holding company’s liability. The consolidated value of ČMN’s assets exceeded CZK 4.8 billion as of the end of 2019. “Covering the bond issue by the parent company, which owns assets at the value of the issued bonds, will provide investors with a significantly higher certainty of repayment. Covering is considered a premium feature on the bond market,” said Lumír Schejbal, partner at law firm Schejbal & Partners.

ČMN has acquired buildings for CZK 2 billion this year
Despite the current slowdown on the real estate market, ČMN carried out one of the largest transactions on the Czech real estate market at the end of June 2020, adding office buildings CITY WEST C1 and C2 into its portfolio. The total leasable area of buildings administered by ČMN is now more than 70,000 sq. m, which ranks ČMN among the 10 biggest office space holders in Prague.

ČMN focuses on buying commercial real estate in large cities and on major national and international companies as tenants. In particular, ČMN concentrates on the stable office sector. In 2019, the ČMN group ranked among the largest local players as measured by the volume of completed transactions. ČMN acquired the Crystal building in the second quarter and the BLOX building in the third quarter of 2019.