Announcement

TAG Immobilien AG launches a convertible bond offering

TAG Immobilien AG / Key word(s): Corporate Action25.06.2012 / 08:15 PRESS RELEASE Not for publication

TAG Immobilien AG launches a convertible bond offering


TAG Immobilien AG / Key word(s): Corporate Action

25.06.2012 / 08:15


PRESS RELEASE

Not for publication or distribution in the United States, Australia, Canada or Japan.

TAG Immobilien AG launches a convertible bond offering

Hamburg, 25 June 2012: The Management Board of TAG Immobilien AG, Hamburg, ('TAG') resolved today, with the approval of the supervisory board, to issue unsubordinated, unsecured convertible bonds (the 'Bonds') convertible into no par value ordinary bearer shares of TAG. The Bonds (each with a denomination of EUR 100,000) will be offered only to institutional investors outside of the US. The pre-emptive rights of shareholders of TAG to subscribe to the Bonds are excluded.

The offering size will be around EUR 95 million with up to 9,642,825 underlying shares. The Bonds will have a maturity of seven years and will be issued and redeemed at 100% of their principal amount. The initial conversion price will be set at a conversion premium of 20.0% - 25.0% above the reference share price, VWAP (volume weighted average price) of the shares on XETRA on the pricing date.

The coupon will be between 4.50% - 5.50% p.a. payable semi-annually in arrear and will also be determined during the bookbuilding process. Holders of the Bonds will be entitled to require an early redemption of their Bonds on the fifth anniversary, after the issue date, at the principal amount together with accrued interest. Pricing is expected to be announced later today and settlement is expected on or around 28 June 2012.

TAG intends to apply for inclusion of the Bonds in the Open Market (Freiverkehr) segment on the Frankfurt Stock Exchange. Deutsche Bank, Frankfurt am Main, is acting as sole Bookrunner in relation to the transaction. Close Brothers Seydler Bank AG, Frankfurt am Main and Kempen & Co N.V., Amsterdam, are acting as Co-Managers.

TAG intends to use the proceeds from the issue of the Bonds for the repayment of a vendor loan resulting from the acquisition of DKB Immobilien AG, future acquisitions and general corporate purposes.

The acquisition of DKB Immobilien AG in March 2012 increased TAG's residential property inventory from some 32,000 units to approx. 57,000 units, and increased the group's investment property to approx. EUR 3 billion. The acquisition was financed by a capital increase as well as by long term bank financing supplemented by a vendor loan which will be repaid following the issuance of the Bonds.

Apart from this vendor loan TAG has approximately EUR 30 million of other debt with higher interest costs than these Bonds. As such, these Bonds will reduce TAG's financing expenses by roughly EUR 1 million per annum going forward and therefore effectively be FFO-accretive. In addition, the early repayment of the vendor loan will lead to interest cost savings of EUR 2 million.

CEO Rolf Elgeti commented 'This bond issue is an opportunistic move by TAG in what seems a very favourable financing environment to us and is intended to de-risk our balance sheet as well as to reduce future funding costs. As the strike price is close to our NAV per share this issue is also protecting the interests of TAG shareholders. Growing the business remains an important part of our strategy but we will continue to make sure that our balance sheet remains healthy and that growth does not compromise the economic position of our existing shareholders.'

IMPORTANT NOTE

NOT FOR DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES OF AMERICA (OR TO US PERSONS), AUSTRALIA, CANADA OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

This press release is for information purposes only and does not constitute or form part of, and should not be construed as an offer or an invitation to sell, or issue or the solicitation of any offer to buy or subscribe for, any securities. In connection with this transaction there has not been, nor will there be, any public offering of the Bonds. No prospectus will be prepared in connection with the offering of the Bonds. The Bonds may not be offered to the public in any jurisdiction in circumstances which would require the Issuer of the Bonds to prepare or register any prospectus or offering document relating to the Bonds in such jurisdiction.

The distribution of this press release and the offer and sale of the Bonds in certain jurisdictions may be restricted by law. Any persons reading this press release should inform themselves of and observe any such restrictions.

This press release does not constitute an offer to sell or a solicitation of an offer to purchase any securities in the United States. The securities referred to herein (including the Bonds and the shares of TAG Immobilien AG) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act') or the laws of any state within the U.S., and may not be offered or sold in the United States or to or for the account or benefit of U.S. persons, except in a transaction not subject to, or pursuant to an applicable exemption from, the registration requirements of the Securities Act or any state securities laws. This press release and the information contained herein may not be distributed or sent into the United States, or in any other jurisdiction in which offers or sales of the securities described herein would be prohibited by applicable laws and should not be distributed to United States persons or publications with a general circulation in the United States. No offering of the Bonds is being made in the United States.

In the United Kingdom, this press release is only being distributed to and is only directed at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') and (ii) high net worth entities falling within Article 49(2) of the Order and (iii) persons to whom it would otherwise be lawful to distribute it (all such persons together being referred to as 'relevant persons'). The Bonds are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Bonds will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this press release or any of its contents.

The shares of TAG Immobilien AG are admitted to trading on the regulated market of the Frankfurt Stock Exchange (Prime Standard) and the Munich stock exchange as well as on the inofficial market (Freiverkehr) of the Berlin, Hannover, Düsseldorf, Hamburg und Stuttgart stock exchanges. ISIN: DE0008303504; WKN: 830350. TAG Immobilien AG shares are listed in the SDAX(R) Index of Deutsche Börse.

Further information can be obtained on the webpage of TAG Immobilien AG: www.tag-ag.com

Press enquiries:
TAG Immobilien AG
Investor & Public Relations
Britta Wöhner / Dominique Mann
Steckelhörn 5
20457 Hamburg
Tel. +49 (0)40 380 32-0
Fax +49 (0)40 380 32-388
ir@tag-ag.com

About TAG Immobilien AG

TAG Immobilien AG is a listed real estate group. Its main business activities entail residential and commercial real estate in German metropolitan regions as well as the provision of real estate services.

TAG's real-estate volume amounts to EUR 3,062 million (as of 31 March 2012). Of this, the company has EUR 2,583 million invested in residential real estate and nearly EUR 475 million in commercial real estate. TAG is solidly financed, with an equity ratio of 27% and mostly long-term financing.

TAG is listed in the SDAX since December 2006.



End of Corporate News


25.06.2012 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de


Language: English
Company: TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Germany
Phone: 040 380 32 0
Fax: 040 380 32 390
E-mail: ir@tag-ag.com
Internet: www.tag-ag.com
ISIN: DE0008303504
WKN: 830350
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, Stuttgart
End of News DGAP News-Service

175226  25.06.2012