Deutsche Wohnen SE: Release according to section 111c of the German Stock Corporation Act (Aktiengesetz - AktG) with the objective of Europe-wide distribution
Disclosure of material transactions with related parties in accordance with section 111c AktG
Berlin, January 4, 2022. Today Deutsche Wohnen SE (Company), as lender, entered into a loan agreement with Vonovia SE (Vonovia), as borrower (Loan Agreement). Vonovia currently holds approximately 86.87% of the shares issued by the Company and is therefore a related party of the Company pursuant to section 111a of the German Stock Corporation Act (Aktiengesetz, AktG). The supervisory board of the Company approved the conclusion of the Loan Agreement on January 2, 2022.
Under the Loan Agreement, the Company as lender is granting an unsecured loan to Vonovia in an amount of up to EUR 2.0 bn for a term of three years and with an interest rate of 0.6% p.a. above the 1-month EURIBOR (incl. EURIBOR Floor of 0.0 % p.a.). The supervisory board of the Company considered the nominal amount of the Loan Agreement of up to EUR 2.0 bn to be the value of the transaction within the meaning of section 111b para. 1 AktG.
Given the credit-worthiness of Vonovia ((Moody's: A3 (stable); S&P: BBB+ (positive); Scope: A- (stable)) the Loan Agreement will be unsecured. The Loan Agreement contains information rights and other covenants that conform with standard market terms for a bank and capital markets financing. In particular, the agreement provides for mechanisms for the continuous monitoring of Vonovia's credit-worthiness and for the right to demand security or to terminate the Loan Agreement extraordinarily if the economic situation should materially deteriorate. The Company is entitled to demand repayment of any loan amounts at any time with 14 days prior notice, e.g. in case of additional liquidity needs beyond the liquidity reserve. Vonovia can make prepayments in whole or in part with 14 days' notice. Amounts repaid are available for redrawing.
After making use of available options to save interest costs by repaying existing bank debt and while maintaining a sufficiently high liquidity reserve of EUR 0.1 bn, the conclusion of the Loan Agreement is in best interest of the Company given the current market environment and the absence of alternative value creating investment opportunities.
Based on the available market data, the Loan Agreement is in line with arm's length principles both with regard to the commercial as well as its other contractual terms. The Company was supported by independent external experts in the preparation and evaluation of the Loan Agreement.
Berlin, January 4, 2022
Deutsche Wohnen SE
The Board of Directors