Commentary & Deal Flow

Reoffer: PerpNC5.5: 9% / 100

Tranche 1 (PerpNC5.5): Final books at re-offer above €200m (incl. €25m JLM interest). Peak book around €300m (including JLM interest)

Launched: PerpNC5.5: €150m @ 9% - Books around €300m (including JLM interest)
IPTs: PerpNC5.5: 9.25%

• Issuer: Kommunalkredit Austria AG
• BBG Ticker: KA Corp <GO>
• Legal Entity Identifier ("LEI") of the Issuer: 549300IEVCBWVV97WC81
• Notes: EUR 150,000,000 Perpetual Fixed-to-Fixed Reset Rate Additional Tier 1 Notes of 2026 with a First Reset Date on 15-May-32
• Status of the Notes / Subordination: The Notes shall qualify as AT1 Instruments and constitute direct, unsecured and subordinated obligations of the Issuer. In the event of insolvency proceedings (reguläres Insolvenzverfahren) (bankruptcy proceedings (Konkursverfahren)) or the liquidation of the Issuer, the obligations of the Issuer under the Notes will rank: (a) junior to all present or future: (i) unsubordinated instruments or obligations of the Issuer (including, but not limited to, claims against the Issuer under its non-preferred senior debt instruments within the meaning of § 131 (3) BaSAG); (ii) Tier 2 Instruments and instruments or obligations of the Issuer, if any, which rank pari passu with or senior to Tier 2 Instruments; (iii) instruments or obligations of the Issuer that do not result from own funds items of the Issuer; and (iv) other instruments or obligations of the Issuer, if any, ranking or expressed to rank subordinated to any unsubordinated instruments or obligations of the Issuer (other than instruments or obligations ranking or expressed to rank pari passu with or subordinated to the Notes); (b) pari passu: (i) among themselves; (ii) with all other present or future AT1 Instruments; and (iii) with all other present or future instruments or obligations of the Issuer ranking or expressed to rank pari passu with AT1 Instruments; and (c) senior to all present or future: (i) ordinary shares of the Issuer and any other CET 1 Instruments; and (ii) other subordinated instruments or obligations of the Issuer ranking or expressed to rank: (A) subordinated to the obligations of the Issuer under the Notes; or (B) pari passu with the ordinary shares of the Issuer and any other CET 1 Instruments.
• Form: Bearer, modifiable global note (the "Global Note") without coupons pursuant to § 24 (b) of the Austrian Securities Deposit Act, as amended.
• Issuer Rating: BBB- / Stable / A-3 by S&P
• Expected Rating of the Notes: B+ by S&P
• Issue Tenor: PerpNC5.5
• Currency: Euro (EUR)
• Principal Amount: EUR 150,000,000
• Pricing Date: 15-Oct-26
• Settlement: 22-Oct-26 (T+5)
• Margin: 580.9bps
• Interpolated Mid-Swap: 3.390%
• Reoffer: 9.000% s.a. cpn / 8.997% s.a. yld / 9.199% a. yld / 100
• Rate of Distributions: The Notes shall bear distributions: (i) at the fixed rate of 9.000% per annum on the Current Principal Amount from (and including) 22-Oct-26 to (but excluding) 15-May-32 (the "First Reset Date"); and (ii) thereafter, at the Reset Rate of 5-year Mid-Swap + 580.9bps from and including the First Reset Date. The Calculation Agent will determine the relevant Reference Rate for each Reset Date on the relevant Reset Determination Date.
• Distribution Payment Dates: Distributions will be paid semi-annually in arrear on 15 May and 15 November in each year, commencing on 15-May-27 (long-first coupon)
• Business Days / Convention: T2, Vienna, Following Business Day Convention, unadjusted, Act/Act (ICMA)
• Possibility of statutory resolution measures: The Resolution Authority may write down, convert, or apply other resolution tools, including deferral, transfer, amendment of the terms or cancellation
• Cancellation of Distributions: The Issuer, at its full discretion, may, at all times cancel, in whole or in part, any payment of distributions on the Notes scheduled to be paid on any Distribution Payment Date for an unlimited period and on a non-cumulative basis. Without prejudice to such full discretion of the Issuer, any payment of distributions on any Distribution Payment Date (and any Additional Amounts thereon) shall be excluded and cancelled mandatorily and automatically: (i) if the Issuer is insolvent or the payment of the relevant amount would result in the insolvency of the Issuer; or (ii) to the extent that the distribution and any Additional Amounts thereon together with any additional Relevant Distributions would exceed the available Distributable Items; or (iii) if and to the extent that the Competent Authority orders that all or part of the relevant distribution payment be cancelled; or (iv) if and to the extent another prohibition or restriction of distributions, or of such distribution when aggregated with any other Relevant Distributions, is imposed by the Applicable Supervisory Regulations or the Competent Authority or any other restriction to make distributions exists under Applicable Supervisory Regulations, including but not limited to any limit resulting from any Maximum Distributable Amount and M-MDA/L-MDA as applicable, at the Issuer and/or the KA Regulatory Group level
• Trigger Event and Write-Down: If, at any time, it has been determined that (i) the Group CET 1 Capital Ratio; and/or (ii) the Issuer CET 1 Capital Ratio is lower than 5.125%, unpaid distributions accrued on the Current Principal Amount to but excluding the Write-Down Effective Date will be cancelled and the Issuer will (without the need for consent of Holders) reduce the Current Principal Amount of each Note by the relevant Write-Down Amount with effect from the Write-Down Effective Date. Write-down pro rata with other Loss Absorbing Instruments, in the amount needed to restore each of the Group and Issuer CET1 ratios to the trigger level, to a floor of EUR 0.01 per Note, and possibly on more than one occasion.
• Write-Up: The Issuer may, at its sole discretion, write up the Current Principal Amount in whole or in part up to a maximum of the Original Principal Amount, provided that a positive Consolidated Profit and a positive Unconsolidated Profit have been recorded for each of the Issuer and the KA Regulatory Group, and subject to certain limitations.
• Optional Redemption Date: The Issuer may in its sole discretion redeem the Notes (in whole but not in part) at the Redemption Amount together with accrued distributions, if any, on: (i) each Business Day during the period from and including 15-Nov-31 to but excluding the First Reset Date; and (ii) the First Reset Date; and (iii) each Distribution Payment Date following the First Reset Date, subject to not less than [15] nor more than [45] Business Days’ prior notice to the Holders.
• Optional Redemption for Reasons of Taxation: The Notes may be redeemed, in whole but not in part, at the option and in the sole discretion of the Issuer, at their Redemption Amount, together with distributions accrued to the date fixed for redemption, if there is a change in the applicable tax treatment of the Notes, subject to certain conditions
• Optional Redemption for Regulatory Reasons: The Notes may be redeemed, in whole but not in part, at the option and in the sole discretion of the Issuer, at their Redemption Amount, together with distributions accrued to (but excluding) the date fixed for redemption, if there is a change in the regulatory classification of the Notes that would be likely to result in their exclusion in whole or in part from own funds under the CRR or their reclassification as a lower quality form of own funds than on the issue date, subject to certain exclusions relating, among other things, to Write-Downs and the treatment of the Notes in the consolidated own funds of the KA Regulatory Group under Articles 81 to 88 CRR, and subject to certain other conditions
• Optional Redemption for Reasons of Minimal Outstanding Aggregate Principal Amount: The Issuer may redeem the Notes, in whole but not in part, at their Redemption Amount, together with distributions (if any) accrued to the date fixed for redemption, if at any time the number of Notes outstanding (calculated by dividing the aggregate Current Principal Amount of the Notes outstanding and held by persons other than the Issuer and its subsidiaries by the Current Principal Amount) has fallen to 25% or less of the number of Notes of this series originally issued, subject to certain conditions
• Waiver of set-off: Applicable
• Governing Law: Austrian law
• ISIN / Common Code / WKN: AT0000A3XKU3 / 353100238 / A4E1XM
• Joint Lead Managers: ABN AMRO, Morgan Stanley (B&D)
• Clearing and Settlement: OeKB CSD GmbH, Strauchgasse 1-3, 1010 Vienna, Austria
• Listing and Admission to Trading: Application has been or will be made to the Vienna Stock Exchange for the Notes to be admitted to trading on the MTF market of the Vienna Stock Exchange. The MTF market of the Vienna Stock Exchange is not a regulated market for the purposes of MiFID II.
• Denominations: EUR 200,000 and integral multiples of EUR 200,000 in excess thereof
• Language of Documentation: English
• Documentation: Preliminary Offering Memorandum dated 14-Oct-26; Final Offering Memorandum expected to be dated 20-Oct-26
• Use of Proceeds: Refinancing of the outstanding EUR 62.8m 2021 AT1 notes, for which Article 78 permission has been received, and general corporate purposes including strengthening the Tier 1 capital base
• Target Market: The manufacturer target market (MIFID II/UK MIFIR product governance) is eligible counterparties and professional clients (all distribution channels). No EU PRIIPs key information document (KID) or FCA Product Disclosure Sourcebook (DISC) disclosure document has been prepared as not available to retail in EEA or the United Kingdom.
• Selling Restrictions: There are restrictions on the offering, sale and delivery of the Notes in the EEA or the United Kingdom. See "Subscription and Sale of Notes" set out in the Offering Memorandum.
• Risk Factors: For a discussion of certain risk factors relating to the Issuer and the Notes that prospective investors should carefully consider prior to making an investment in the Notes, see "Risk Factors" set out in the Offering Memorandum.
• TOE / FTT: 15-Oct-26 at 16:03 CET / 16:20 CET