Yesterday ECM introduced new bond issue worth CZK
1bn (EUR 35.8m) with floating rate 6M PRIBOR + 2.9% p.a. with bond face value CZK
1m. The bond is due on 2012. Proceeds should be used to finish current projects as well as projects in the pipeline, e.g. project Breznicka in Zlin, Palace Center in Ostrava or Shopping Center in Ryazan. As ECM’s CEO stated, bonds are not secured by any of ECM assets.
As this transaction has been announced earlier and only the details were made public yesterday we see it as neutral. In fact ECM informed previously about its plans to issue bonds worth as much as CZK
2bn (EUR 71.6m) so we expect this to be only first step to obtain necessary funds for further expansion. Should the ECM increases overall its debt by CZK
2bn in 2007, its D/E ratio will increase to about 1.2x