K2A Knaust & Andersson Fastigheter : Investor presentation 2021-09-23

Green Bond

Investor Presentation

September 2021

K2A Knaust & Andersson Fastigheter AB (publ)

Investor presentation - 23 September 2021

DISCLAIMER

Acceptance of limitations: The information in this presentation (the "Material") is furnished by K2A Knaust & Andersson Fastigheter AB (publ), 556943-7600 ("K2A" or the "Company") solely for the recipient's information in connection with a contemplated issuance of notes (the "Notes"). The intended recipients are determined solely by Arctic Securities AS, filial Sverige, Nordea Bank Abp and Swedbank AB (publ) (the "Joint Bookrunners") together with the Company. By attending a meeting where the Material is presented, or by reading the Material, you agree to be bound by the terms, conditions, limitations and notifications described below. The Material is strictly confidential and may not be disclosed, reproduced or distributed to any other person unless expressly agreed in writing by the Joint Bookrunners. References to "K2A", the "Company", the "Issuer" and the "Group" refer in this Material to K2A Knaust & Andersson Fastigheter AB (publ) and its subsidiaries, unless otherwise indicated by the context.

Use of the Material: This Material does neither constitute an offer to sell nor a solicitation of an offer to buy any securities, and it does in no way constitute any form of commitment or recommendation in relation thereto. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information in the Material. The content of this Material is not to be construed as legal, credit, business, investment or tax advice.

No financial, credit or business advice: The Joint Bookrunners are not giving and are not intending to give financial, credit, investment, legal or tax advice to any potential investor, and this Material shall not be deemed to be financial advice from the Joint Bookrunners to any potential investor. Participation, by the means of subscription of Notes, involves a high level of risk and several factors could cause the actual results or performance of the Company to be different from what may be expressed or implied by statements contained in this Material. Investors should not subscribe for or purchase any financial instruments or securities only on the basis of the information provided herein and acknowledge that each investor will be solely responsible for and rely on its own assessment of the market and the market position of the Company and that it will conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the Company. Any investor investing in the Notes is bound by the final terms and conditions for the Notes, which the investor acknowledges having accepted by subscribing for the Notes. Investors are encouraged to request from the Company and other sources such additional information as they require to enable them to make informed investment decisions, to seek advice from their own legal, tax and financial advisors and to exercise an independent analysis and judgment of the merits of the Company.

No liability: Although the Company has endeavoured to give a correct and complete picture of the Company and the Group, none of the Joint Bookrunners or any of the Joint Bookrunners' subsidiaries, directors, officers, employees, advisors or representatives (collectively the "Representatives") have independently verified the information in this Material and none of Joint Bookrunners or any of their Representatives may be held liable for any loss or damage of any kind, whether direct or indirect, arising from the use of this Material.

Information sources and forward looking statements: The information in this Material is presented by the Company or constitutes publicly available material and has been produced by the Company exclusively for information purposes. Only a limited due diligence has been carried out in connection with the preparation of this Material. Thus, there may be risks related to the Company which are not included in this Material and which could have a negative effect on the Company's operations, financial position, earnings and result. No information in this Material has been independently verified by the Joint Bookrunners or any advisors to the Company or the Joint Bookrunners. The information relating to the Company does not constitute a complete overview of the Company and must be supplemented by the reader wishing such completeness. Furthermore, this Material may contain forward-looking statements that reflect the Company's current views with respect to certain future events and potential financial performance. Such statements are only forecasts based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties and no guarantee can be given that such expectations are correct. The Company cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the Company to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements.

Financial information: This Material contains financial information regarding the businesses and assets of the Company and the Group. Such financial information may not have been audited, reviewed or verified by any independent accounting firm. Hence, such financial information might not have been produced in accordance with applicable or recommended accounting principles and may furthermore contain errors and/or miscalculations. The inclusion of financial information in this Material should not be regarded as a representation or warranty by the Company or the Joint Bookrunners, or any of their respective Representatives as to the accuracy or completeness of such information's portrayal of the financial condition or results of operations of the Company.

Actuality: The Material is dated 23 September 2021. Neither the Company nor the Joint Bookrunners can guarantee that there has not been any change in the affairs of the Company since such date, nor do they intend to, or assume any obligation to, update or correct any information included in the Material. The Material may however be changed, supplemented or corrected without notification.

Conflicts of interest: The Joint Bookrunners and their clients and/or employees may hold shares, options or other securities of any issuer referred to in this Material and may, as principal or agent, buy or sell such securities. Furthermore, the Joint Bookrunners have engaged in, or may in the future engage in, investment banking and/or commercial banking or other services for the Company in their ordinary course of business. Accordingly, conflicts of interest may exist or may arise as a result of the Joint Bookrunners having previously engaged, or will in the future engage, in transactions with other parties, having multiple roles or carrying out other transactions for third parties with conflicting interests.

Prospectus: The Material does not constitute a prospectus for purposes of the EU Prospectus Regulation (Regulation (EU) 2017/1129). Accordingly, the Material has not been approved by any supervisory authority. However, a prospectus relating to the admission to trading of the Notes may be prepared and approved and will, in such case, be published and available at the Swedish Financial Supervisory Authority's website and at the Company's website.

Distribution: The information in this Material is not for release, publication or distribution, directly or indirectly, in or into the United States or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. No securities referred to in this Material have been or will be registered by the Company under the U.S. Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States. This Material may not be distributed into or in the United States or to any "US person" (as defined in Rule 902 of Regulation S under the Securities Act). The distribution of this Material in other jurisdictions may be restricted by law and persons into whose possession this Material comes should inform themselves about, and observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdiction. In so far this Material is made or would cause any effect in the United Kingdom, this Material is only addressed to and directed at persons in the United Kingdom who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, or (iii) are other persons to whom this Material may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons"). This Material must not be acted on or relied on in the United Kingdom by persons who are not Relevant Persons. Any investment or investment activity to which this Material relates is available only to Relevant Persons in the United Kingdom and will be engaged in only with such persons. Further, the distribution of this Material and any purchase of or application/subscription for securities may be restricted by law in certain jurisdictions, and persons into whose possession this Material comes should inform themselves about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the applicable securities laws of any such jurisdiction.

Target market: Solely for the purposes of the manufacturers' (as used herein, "Manufacturers" refers to the Joint Bookrunners) product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients and retail clients, each as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients and retail clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a "Distributor") should take into consideration the Manufacturers' target market assessment; however, a Distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the Manufacturers' target market assessment) and determining appropriate distribution channels.

PRIIPs regulation: In the event of issuance of Notes, the Notes are not deemed to fall within the scope of Regulation (EU) No 1286/2014 (as amended) and no key information document (KID) has been prepared. For the avoidance of doubt, the target market assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Notes.

Applicable law: The Material is subject to Swedish law, and any dispute arising in respect of the Material is subject to the exclusive jurisdiction of Swedish courts (with District court of Stockholm as court of first instance).

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1. INTRODUCTION AND TRANSACTION SUMMARY

1. COMPANY OVERVIEW
2. PORTFOLIO AND MARKET OVERVIEW
3. SUSTAINABILITY AND GREEN FINANCE FRAMEWORK
4. FINANCIAL HIGHLIGHTS
5. CORPORATE GOVERNANCE
6. RISK FACTORS
7. APPENDIX

THE GREEN REAL ESTATE

COMPANY

Investor presentation - 23 September 2021

THE OFFERING IN BRIEF

Snapshot of K2A

• K2A Knaust & Andersson Fastigheter AB is a real estate Company focusing on long-term ownership and property management of in-house developed rental apartments and community service properties
• The Company owns and develops space-efficient rental apartments in Stockholm/Mälardalen and university cities in Sweden
• The number of apartments in the property and project portfolio amounts to 8,634 with a property value of SEK 7,065m (as per Q2 2021)
• K2A has a sustainability focus throughout the entire value chain:
• • Nordic Swan Ecolabel (Sw. Svanenmärkt) properties since 2017
  • First company in the world to have its equity classified as green with 76 percent of revenue streams and 88 percent of investments classified as green by CICERO respectively
  • Green Finance Framework included in Nasdaq Green Equity Designation.
  • New goal to become climate positive through the entire company's operations by 2027
• Listed on Nasdaq Stockholm with a market cap of SEK 6.0bn1)

The transaction in brief

• K2A established a MTN programme with a framework of SEK 3 billion and published the prospectus on the 21th of May 2021
• In June 2021, K2A issued its first bond under the MTN programme. A senior unsecured Green bond of SEK 400m and a tenor of 3.0 years
• K2A intends to issue a SEK 400m (expected) 3.5 year senior unsecured Green FRN bond, under the Issuer's MTN programme, subject to market conditions
• The net proceeds shall be used in accordance with the Issuer's Green Finance Framework
• The Issuer has the intention to list the bonds within 30 days on the Sustainable Bond List of Nasdaq Stockholm

		Summary of indicative terms
Issuer:	K2A Knaust & Andersson Fastigheter AB (publ) ("K2A" or the "Issuer")
Instrument:	Senior unsecured green bond
Initial issue amount:	SEK 400m (expected)
Nominal amount:	1,250,000
Coupon:	STIBOR 3m + [●] bps, no STIBOR floor. To be paid quarterly in arrears
Maturity:	[●] April 2025
Use of Proceeds:	In accordance with the principles set out in the Green Finance Framework
Documentation:	Issuer's MTN programme
	The Issuer shall at all times procure that (on a consolidated group level):
Financial covenants:	• Equity Ratio ≥ 15%
	• Interest Cover Ratio ≥ 1.25x
Div. restriction:	Subject to Incurrence Test: Equity Ratio ≥ 20% (dividends on preference shares and hybrids excluded)
	• Restrictions on Financial Indebtedness, Market Loans and guarantees
	•	Information undertakings
	•	Compliance with laws
	• No substantial change of business
	• Dealings with related parties
General undertakings and	•	Disposals of assets
other terms:	•	Merger and demerger
	•	Admission to trading
	•	Insurances
	•	Maintenance of Properties
	•	Environmental
	•	Green Finance Framework
Cross default/acceleration:	•	Cross-acceleration with a threshold of financial indebtedness of SEK 50,000,000
	Investor put option at 101% of par value if any of the following events occurs:
Put option:	• Change of Control Event: 50% ownership threshold (with certain exceptions)
	• Delisting Event: (Issuer's shares or bonds (once listed)) have ceased to be listed on Nasdaq Stockholm (or similar)
Call option:	100% of Nominal Value six months prior to Final Maturity Date subject to being financed with new Market Debt
Listing:	Sustainable Bond List of Nasdaq Stockholm
Agent:	Nordic Trustee
Governing law:	Swedish law
Joint Bookrunners:	Arctic Securities, Nordea and Swedbank

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1) Total market cap as per 19 September 2021 (Bloomberg), K2A's class B-share and preference share are listed at Nasdaq Stockholm

Investor presentation - 23 September 2021

TODAY'S PRESENTERSS

	JOHAN KNAUST				CHRISTIAN LINDBERG
	CEO				DEPUTY CEO
Johan Knaust is CEO and co-founder of			Christian Lindberg is Deputy CEO and
	K2A				former CFO of K2A
Prior to founding K2A Johan co-founded			Prior to joining K2A Christian founded HCL
Sveafastigheter and Leimdörfer's Corporate			Invest focusing on Corporate Finance
Finance. Johan has also worked at Goldman			consulting. Christian has also worked at HQ
	Sachs in London, within Fixed Income				Bank, within Corporate Finance

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