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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 TAGs residential property inventory from some 32,000 units to approx. 57,000 units, and increased the groups 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 TAGs 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.

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DGAP-News: TAG Immobilien AG launches a convertible bond offering