Host Property AB - Press release 04.01.2021

Host Property AB (publ) has reached an agreement in principle regarding its outstanding bond loan, a written procedure to implement the agreement will follow in January 2021

Reference is made to the SEK 500,000,000 senior secured and guaranteed floating rate bonds 2019/2022 with ISIN SE0013486057 (the "Bonds") issued by Host Property AB (publ) (the "Company") and the terms and conditions for the Bonds (the "Terms and Conditions"). Any capitalised term used but not defined herein shall have the meaning given to it in the Terms and Conditions.

Reference is also made to the discussions and negotiations during the autumn of 2020 with certain major Bondholders representing approximately 62.20 per cent. of the Total Nominal Amount (the "Major Bondholders"), the warning notice sent by the Bond Trustee to the Company on 19 November 2020 on behalf of the Major Bondholders in relation to the alleged Events of Default under the Terms and Conditions (the "Warning Notice") and the Company's objection to the claimed Events of Default in the Warning Notice as expressed in a press release issued by the Company on 1 December 2020.

The Company hereby announces that the ongoing discussions and negotiations between the Company, the Bond Trustee and the Major Bondholders in relation to the Bonds have resulted in an agreement in principle regarding certain amendments to the Terms and Conditions and addition of new security, as summarised below (the "Amendments") and that the alleged Event of Defaults are waived.

It is noted that the implementation of the Amendments and the waiver is subject to the Bondholders' approval in a Written Procedure to be held in accordance with the Terms and Conditions and that a notice of Written Procedure will be sent to the Bondholders during the first half of January 2021.

The Amendments are summarised below:

(a) the Company shall pay an upfront amendment fee to the Bondholders of 1.0 per cent. of the total Nominal Amount pro rata if the Amendments are approved in a Written Procedure;

(b) the Company to procure that first priority ranking Security is provided for the Company's punctual performance of the Secured Obligations in favour of the Secured Parties represented by the Bond Trustee over:

(i) all receivables to a Group Company from time to time owed by Flying Elephant AS or any subsidiary of Flying Elephant AS not being a part of the Group; and

(ii) property mortgages in respect of the properties Jessheim and Söderhamn hotel and all shares in any property holding company relating to the properties Jessheim and the Söderhamn hotel;

(c) no Group Company shall pay any dividend, grant any loan to a third party or make any other distribution to any entity outside the Group until the maturity of the Bonds;

(d) the remaining funds standing to credit on the Refurbishment Account (being approx. SEK 99 million as at 1 December 2020) to be used as follows:

(i) SEK 65 million to be paid as an early redemption of the Bonds at par plus any outstanding interest payments;

(ii) SEK 10 million to be transferred to the Escrow Account as Security in favour of the Secured Parties represented by the Bond Trustee, and that the SEK 10 million shall be used towards early redemption of the Bonds at par plus outstanding interest payments, upon the Bondholder Committee's (as defined below) demand; and

(iii) any remaining amount, approximately SEK 24 million, less any amendment transaction costs, to remain on the Refurbishment Account and may only be used by the Company for maintenance capital expenditures on the Properties to preserve asset values, in each case subject to the approval of the Bondholder Committee;

(e) the Company shall maintain a cash interest coverage ratio (CICR) and an Issuer Group LTV as set out in the table below:

Period

2020 Q4

2021 Q1

2021 Q2

2021 Q3

2021 Q41)

CICR

1.0x

1.0x

1.0x

1.3x

1.3x

Period

2021 Q42)

2022 Q1

2022 Q2

2022 Q3

2022 Q4

LTV

70%

70%

65%

60%

60%

1) The Company to maintain CICR at 1.3x until maturity of the Bonds.

2) First Test Date 31 December 2021

(f) the Company shall redeem all, but not some only, of the outstanding Bonds in full on the Maturity Date with an amount per Bond equal to 104.0 per cent. of the Nominal Amount together with accrued but unpaid Interest;

(g) each of (i) voluntary total redemption or partial redemption, (ii) Mandatory Prepayment due to Permitted Partial Divestment or a Permitted Land Parcel Divestment, (iii) Change of Control Event and a Listing Failure Event up to and including 31 December 2021 shall be at an amount per Bond equal to 102.0 per cent. of the Nominal Amount and any time thereafter at an amount per Bond equal to 104.0 per cent. of the Nominal Amount (in each case together with accrued but unpaid Interest;

(h) prepayment option from the Refurbishment Account up to and including 31 December 2021 at an amount per Bond equal to 100.0 per cent. of the Nominal Amount together with accrued but unpaid Interest;

(i) the Major Bondholders shall establish a group of (the "Bondholder Committee") to inter alia act on behalf of the Bondholders in certain situations in accordance with the Amendments;

(j) the Company shall be allowed to change the terms of the Hotel Lease Agreements in terms of securing best effort on new lease terms including operating the hotels in-house, as long as such changes are not detrimental to the interest of the Bondholders, without a specific pre-approval from the Bondholders, however, any changes to the Hotel Lease Agreements or new lease agreements shall also include a new clause stating that the leases may be terminated by the Bondholder Committee at any point after an Event of Default under the Bonds (in case of a lessee being Flying Elephant AS or any subsidiary of Flying Elephant AS not being a part of the Group) and any new third party lessee shall be subject to the approval of the Bondholder Committee (acting reasonable and in good faith);

(k) the Bondholder Committee shall have the right at their own discretion to appoint up to two board members in any Group Company;

(l) the Company shall appoint any of PWC, EY, KPMG or Deloitte (as determined by the Bondholder Committee) as auditors in any Group Company following the end of the first quarter 2021, if so requested by the Bondholders Committee; and

(m) the Bondholder Committee shall have the right at their own discretion to request second opinions from such appointed auditor at the expense of the Company on any financial calculations, financial reports and all other matters deemed to be of material importance as determined by the Bondholder Committee.

This is information that Host Property AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the Company's contact person set out below, at 18.00 on January 4, 2021.

Christian Fuhr, Investor Relations, Host Property AB, mob: +47 98 22 85 16, email: christian.fuhr@host.no

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Reference is made to the SEK 500,000,000 senior secured and guaranteed floating rate bonds 2019/2022 with ISIN SE0013486057 (the "Bonds") issued by Host Property AB (publ) ("Host Property") and the terms and conditions for the Bonds (the "Terms and Conditions"). Any capitalised term used but not defined herein shall have the meaning given to it in the Terms and Conditions.


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