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Hypo Alpe-Adria-Bank International AG successfully places EUR 500 million pre-IPO exchangeable bond
Klagenfurt/Vienna, 24 June 2005 — HSBC Bank plc as lead manager and bookrunner and VCP as adviser together with Kärntner Landes- und Hypothekenbank-Holding as issuer today announced the successful placing with international institutional investors of EUR 500 million zero coupon notes conditionally convertible into shares in Hypo Alpe-Adria-Bank International AG.
As part of the continuing internationalisation of Hypo Alpe-Adria-Bank International AG, Kärntner Landes- und Hypothekenbank-Holding has placed EUR 500 million zero coupon notes conditionally exchangeable for shares in Hypo Alpe-Adria-Bank International AG (a pre-IPO exchangeable bond). The notes are guaranteed by the Province of Carinthia. The maturity of the notes is three years, and the issuer has the option of redeeming the notes as of 24 June 2007 and at quarterly intervals thereafter. On maturity, the notes are redeemable in cash at par, together with any accrued interest. If before the notes become due there is a public placing of shares in Hypo Alpe-Adria-Bank International AG (an IPO) combined with an admission to listing on the Stock Exchange with the aim of achieving a free float of at least 22 percent, the holders of the notes have the option under the terms and conditions of the bond of exchanging the notes for shares in Hypo Alpe-Adria-Bank International AG. In the event of an IPO and the conversion of the notes into shares, the holding of Kärntner Landes- und Hypothekenbank-Holding in Hypo Alpe-Adria-Bank International AG will under existing conditions be reduced from 52 percent to not less than 25 percent plus one share. The yield to maturity of the notes at issue has been set at 2.52 percent, and admission to listing of the notes on the Luxembourg Stock Exchange is applied for.
Custom tailored financing for Carinthia
“The interest from international stock and bond investors was lively, and the notes were successfully placed with selected institutional investors. The pre-IPO exchangeable bond is an innovative product, and this one was structured to meet the requirements of Kärntner Landes- und Hypothekenbankholding and has been very well received by a wide range of investors,” says Cynthia Prieto, director of HSBC, visibly satisfied with the success of the launch. “There has never been a pre-IPO exchangeable bond on this scale before in the Austrian market,” confirms Russell Julius, Head of Equity Capital Markets (EMEA) at HSBC, “This issue is an ideal precursor to a successful stock exchange listing.”
Heinrich Pecina, senior partner in VCP, who has advised on the transaction, adds: “This has been a very exciting deal for us and for HSBC, and it enables Carinthia to take best possible advantage of the favourable market environment in an innovative way. This novel construction in Europe has given us a chance to demonstrate the flexibility so essential in this kind of transaction. The special requirements of the Province of Carinthia have been optimally served.”
International investor base for dynamic growth
Kärntner Landes- und Hypothekenbank-Holding, with its 52 percent holding the majority shareholder in Hypo Alpe-Adria-Bank International AG – 48 percent is held by Grazer Wechselseitige Versicherung AG – is thus taking the first step towards a possible stock exchange listing of the international finance group. "With its more than 200 outlets in Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia-Montenegro, Liechtenstein and Germany, Hypo Alpe-Adria Group is one of the fastest growing finance groups in Europe. Its owners wish to create the optimal conditions to strengthen the market position of this Carinthia-based bank. After a healthy capital structure, one of the prime considerations is a broader ownership basis, so we have been aiming for a balanced base of international investors,” is how Klaus Bussfeld, director of Kärntner Landes- und Hypothekenbank-Holding, explains the advantages of a possible listing.
Proceeds of issue for Carinthia’s future
The gross proceeds of the issue comes to EUR 500 million; Kärntner Landes- und Hypothekenbank-Holding will in all likelihood invest the bulk of the proceeds in Carinthia’s Future Fund. Carinthia’s Provincial Governor Jörg Haider comments: “Our joint efforts have turned Hypo Alpe-Adria-Bank into Europe’s most successful regional bank. As the Bank’s majority shareholder, the Province of Carinthia can build on Hypo Alpe-Adria-Bank’s record of success to establish a Future Fund for our Province, which in the years to come will be the dynamo fuelling Carinthia’s growth, innovation and employment. The Future Fund is launched today!”
Deputy Provincial Governor Peter Ambrozy adds: “The Future Fund is a great opportunity for Carinthia. Investments in infrastructure, education and research are what underwrite employment and job security. Our aim is to create 10,000 new jobs for Carinthia.”
Stock market listing planned for 2007/2008
As already announced at the annual results press conference, Hypo Alpe-Adria-Bank International AG is currently examining all the possible routes to a stock exchange listing, which it is envisaged will take place in the autumn of 2007 or in spring 2008. Current plans call for the Province of Carinthia to reduce its holding to 25 percent plus one share, so that roughly 30 percent of the shares will become the free float. “It is our constant endeavour to meet the high expectations of our owners, and above all to exceed the expectations of our 750,000 customers. Even if the conversion into shares in Hypo Alpe-Adria-Bank International AG, provided it happens, can only take place in two years’ time at the earliest, from the Bank’s point of view our investor base has been permanently enlarged as of today. With immediate effect, a major corporate goal will be the satisfaction of this demanding group of investors. I very much welcomed the decision last year by the Bank’s owners, the Province of Carinthia and Grazer Wechselseitige Versicherung AG, to set their sights on a stock exchange listing. We shall be using the current and the coming financial year to prepare in detail for the IPO,” said Wolfgang Kulterer, Chairman of the Executive Board of Hypo Alpe-Adria-Bank International AG, in a press conference in Vienna on 24 June.
About Kärntner Landes- und Hypothekenbank-Holding
The origins of Kärntner Landes- und Hypothekenbank go back to its foundation by resolution of the Parliament of the Province of Carinthia of 17 February 1894 as a mutual credit institution. In 1991 Kärntner Landes- und Hypothekenbank transferred its entire banking operations to a public limited company, Hypo Alpe-Adria-Bank International AG (until 1999 called Kärntner Landes- und Hypothekenbank AG), whose business was the same as that of the former public sector mortgage bank.
The mortgage bank, Kärntner Landesholding, continued in existence, but changed the nature of its activities. Its primary purpose since then has been to hold the shares in the bank into which its operations were spun off. Kärntner Landesholding has separate legal personality, but as a public sector corporation has no owners in the strict legal sense.
Hypo Alpe-Adria-Bank International AG
Hypo Alpe-Adria-Bank International AG is an international finance group (Standard & Poor’s Rating AA und Moody’s Rating Aa2) with more than 200 outlets in Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia-Montenegro, Liechtenstein and Germany. Its owners are Kärntner Landes- und Hypothekenbank-Holding, which holds 52 percent of the shares, and Grazer Wechselseitige Versicherung AG, with 48 percent.
HSBC
Headquartered in London, HSBC is one of the largest banking and financial services organisations in the world. HSBC's international network comprises over 9,800 offices in 77 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by nearly 200,000 shareholders in some 100 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts. Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities.
About VCP
Barely 7 years after its formation, VCP is one of the leading independent investment and corporate finance advisers in Converging Europe (new EU member states, potential accession countries and directly affected EU member states such as Austria and Germany). Specialising in corporate finance advisory services and selective private equity investment, VCP plays a major role in this convergence process, and the international experts of this Austrian investment house have been responsible for transactions to the value of more than EUR 3 billion since its formation. VCP is owned and managed by five partners, who – in common with all its staff – have many years of international experience.
Important legal notice
This press release is neither an offer to sell nor an invitation to buy securities. It is not to be construed as evidence of any particular transaction, and is only for the purposes of information. This document in particular does not represent an offer to sell any shares or securities in the United States of America or to any U.S. persons in the sense of Regulation S of the U.S. Securities Act 1933 as amended (the “Securities Act”). The securities and the guarantee referred to in this press release are not and will not be registered under the Securities Act and may be sold or offered for sale in the United States only on the basis of prior registration, or without prior registration on the basis of an exemption under the U.S. Securities Act. Neither Kärntner Landes- und Hypothekenbank-Holding nor Hypo Alpe-Adria-Bank International AG nor the Province of Carinthia nor HSBC Bank plc intend to register the shares or securities of Kärntner Landes- und Hypothekenbank-Holding or Hypo Alpe-Adria-Bank International AG in the United States, or to make a public offer of securities in any country and in particular not in the United States of America or to any U.S. persons in the sense of Regulation S of the U.S. Securities Act 1933. The distribution of this document and the offering for sale or the sale of shares and securities may be subject to restriction by law in certain jurisdictions. ´The contents of this document are the responsibility of Kärntner Landes- und Hypothekenbank-Holding.
Further information
VCP press office
Pleon Publico Public Relations & Lobbying
Claudia Müller-Stralz
Tel: (+43) 1 717 86 0
Fax: (+43) 1 717 86 60
E-mail: claudia.mueller@pleon-publico.at
Hypo Alpe-Adria-Bank International AG
Silvia Graf
PR International
Tel: +43 50202 2880
silvia.graf@hypo-alpe-adria.com
www.hypo-alpe-adria.com
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