Austrian Billionaire Joins Green Rush With Rare Public Bond

(Bloomberg) -- Signa Development Selection AG is preparing to sell green bonds in a rare public offering from the real-estate company owned by Austrian billionaire Rene Benko.

Signa Development has mandated Deutsche Bank AG, BNP Paribas SA and Jefferies Group LLC to organize an investor call on the planned 300 million euro ($355 million) green note that matures in five years, according to a person familiar with the transaction who asked not to be named. The bond will be callable in two years and carries an equity clawback clause of up to 40%.

The deal is a rare venture onto public debt markets for a company that’s relied mostly on private deals to fund its rapid expansion in recent years. It’s also a test of market appetite for bonds issued in an industry that’s been hit hard by the coronavirus pandemic.

Signa Development is working on a pipeline of projects primarily in Berlin and Vienna to boost its balance sheet from 4.1 billion euros at the end of last year.

It has an ESG score of 10.6 at Sustainalytics, placing it in the low-risk group and among the top 5% of real-estate companies globally. The notes are rated B at S&P Global Ratings, or five steps below investment grade, which cited the company’s high leverage and inherent volatility in the real-estate development industry.

©2021 Bloomberg L.P.