Genova strengthens earnings and extends loan maturities

Genova has signed new financing agreements with banks for approximately SEK 3,400m in total. Combined with several other measures to reduce the company’s financial expenses, this will strengthen Genova’s earnings and thus its income from property management per share. Overall, the completed measures will reduce financial expenses by SEK 46m on an annual basis, while increasing loan maturities to 3.2 years and the fixed-rate period to 3.0 years.

“A key component of Genova’s rapid growth is in-depth knowledge of properties combined with extensive financial expertise. By working systematically, we have continued to reduce our financial expenses, which will strengthen earnings and increase income from property management per share moving forward. This will enable investments in the property segments where we see the best opportunities for continued profitable growth in order to achieve our financial targets with limited risk, creating scope for dividends to our shareholders”, says Michael Moschewitz, CEO of Genova.

Effects on interest expense, loan maturities and fixed-rate periods
Due to the measures taken in the credit portfolio, a considerable share of the loan portfolio has been refinanced and maturities were extended on favourable terms.

New financing agreements
Genova signed new financing agreements with banks for approximately SEK 3,400m in total, of which SEK 700m was green finance, with an average maturity of 3.6 years. The refinancing strengthens Genova’s liquidity by almost SEK 100m, with an annual positive impact of nearly SEK 30m on cash flow due to lower amortization.

Interest-rate derivatives
During July and August, Genova entered into interest-rate swaps of SEK 1,080m with an average fixed rate of about 2.3% and an average term of approximately six years.

Bonds
In August, Genova issued senior unsecured green bonds for an initial amount of SEK 450m under a total framework of SEK 650m. The bonds carry a floating interest rate of STIBOR 3M + 415 basis points and will mature in November 2027. The proceeds have mainly been used to repay expensive existing debt.

As a result of these measures, the average interest rate, including construction credit, is expected to decrease by around 65 basis points to 5.37% compared with 6.02% as of 30 June 2024. On an annual basis, this reduction will lower interest expense by approximately SEK 35m. At the same time, loan maturities will increase from 1.9 to 3.2 years, and the fixed-rate period from 2.0 to 3.0 years.

Hybrid bonds
In addition to the measures taken in Genova’s credit portfolio, Genova repurchased outstanding hybrid bonds for an amount of SEK 342.5m in the third quarter and issued new hybrid bonds of SEK 300m. The issue was carried out with a credit margin of 5.50%, which is 125 basis points lower than Genova’s existing outstanding hybrid bonds. This reduces the interest expense for hybrid bonds by about SEK 11m on an annual basis.

For further information, please contact:
CEO, Michael Moschewitz, mobile +46 (0)70 713 69 39, michael.moschewitz@genova.se

About Genova
Genova Property Group AB (publ) is a dynamic property company with extensive expertise in various segments of the property market. The company aims to drive sustainable value growth through active property management, urban development, project development and property transactions in Sweden. As of 30 June 2024, Genova owned properties valued at approximately SEK 9.5 billion and the company held a substantial building rights portfolio. Genova’s share has been listed on Nasdaq Stockholm since 2020.

Genova – Smålandsgatan 12 – SE-111 46 Stockholm – www.genova.se