Bundesimmobiliengesellschaft m.b.h.

Bundesimmobiliengesellschaft m.b.H.
Vienna, Austria
Ratings and Contacts
Category Moody’s Rating
Issuer Rating Aaa
Bonds Aaa
Commercial Paper -Dom Curr P-1
Key Indicators
Analysis
Analyst Phone
Janne Thomsen/London 44.20.7772.5454
Gabriele Baur/London
Yves Lemay/New York 1.212.553.1653
Bundesimmobiliengesellschaft m.b.H.
1998 1999 2000 2001 2002
Total assets (Euro 000's) 1,350,724 1,386,100 2,066,280 2,945,463 3,734,482
Total capital (Euro 000's) 29,436 51,177 257,923 355,798 323,161
Return on average assets (%) 1.18 1.08 0.89 3.32 1.81
Recurring earning power (PPI % avg. assets) 1.29 1.29 0.88 5.66 3.14
Net interest margin (%) 11.31 11.36 7.39 11.73 7.51
Cost/ income ratio 88.81 88.83 90.05 59.86 63.33
Problem loans % gross loans — — — — —
Tier 1 ratio (%) — — — — —
Opinion
Credit Strengths
Credit strengths of Bundesimmobiliengesellschaft m.b.H
(BIG) are:
-The 100% state ownership of BIG is enshrined in the
revised BIG law (29 December 2000) and the Ministry of
Finance has no intention to sell or privatise the entity.
-BIG benefits from steady and stable revenues due to the
nature of its activities, i.e. property ownership and management
of public buildings for schools and universities.
-The very specific nature of BIG ’s business provides comfort
that the company will remain of strategic importance to
its current owner.
- Strong state oversight and commitment to ensure financial
viability is also present through board representation,
nomination of senior management and auditing.
Credit Challenges
Credit challenges of BIG are:
- A future expansion into private sector property activities
cannot be ruled out, especially as BIG is not barred from
commercial activities.
- High debt levels required to fund acquisition of state
properties.
-A majority of the tenants can terminate the rental agreement
with a year’s notice period.
- Rigid cost structure.
- Somewhat inflexible rent adjustment factors.
Rating Rationale
BIG is rated Aaa, which is at the level of the Republic of Austria,
which owns 100% of it. Its legal status is a Gmbh (public
limited company). Implicit support is provided via 100%
ownership by the Republic of Austria and the strategic role
that BIG performs on behalf of the government. We also do
not believe that its status is likely to change in the foreseeable
August 2003
future. Any alterations in ownership structure or legal status
would require an overhaul of the BIG law.
BIG's main activities are government-related, consisting of
facilitating and managing properties needed by the state to
carry out its functions. The properties consist mainly of
schools and university buildings, as well as administrative
buildings of ministries. As such, the activity is closely linked
to central government administration and state functions, and
is therefore less prone to volatile demand.
Although BIG's stand-alone financials are less sound than
those of a comparable private sector entity, the proximity to
the state and state functions strongly mitigates these factors.
Rating Outlook - Stable
Moody's stable rating outlook for BIG is based on the
medium-term expectation that the 100% ownership by the
Republic of Austria will continue, stable revenues and a generally
predictable cost structure.
In addition, the outlook is based on the expectation that
Bundesimmobiliengesellschaft MbH will be able to adequately
service the debt related to the agreed acquisition of
state properties like schools, and university buildings with the
revenue from operations and some refinancings (within the
framework of BIG ’s projections).
What Could Change the Rating - DOWN
Any decision to privatise, or part-privatise the entity would
exert negative pressure upon the Aaa rating.
Recent Developments/Results
1H 2003 showed good profit after tax, despite the increasing
financing cost as debt levels reach peak in 2003 as the last purchase
of properties from the central government are concluded.

Related Research
Analysis:
Bundesimmobiliengesellschaft m.b.H., August 2003 (Doc ID#79243)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this
report and that more recent reports may be available. All research may not be available to all clients.
© Copyright 2003, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. ALL INFORMATION
CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER
TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY
FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by
MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as
is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or
fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part
caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers,
employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct,
indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such
damages, resulting from the use of or inability to use, any such information. The credit ratings, if any, constituting part of the information contained herein are, and must be construed solely
as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY,
TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR
MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of
any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider
of credit support for, each security that it may consider purchasing, holding or selling. Pursuant to Section 17(b) of the Securities Act of 1933, MOODY'S hereby discloses that most issuers of
debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment of any rating, agreed to
pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,500 to $1,500,000.

This Analysis provides a discussion of the factors underpinning the
credit rating/s and should be read in conjunction with our Credit
Opinion. The most recent ratings, opinion, and other research
specific to this issuer are provided on Moodys.com. Click here to link.
Analysis
August 2003
The main rating driver of Bundesimmobiliengesellschaft’s (BIG) Aaa rating is its 100% ownership by the Republic of
Austria, rated Aaa. BIG’s main activities are government-related, consisting of facilitating and managing properties
needed by the state to carry out its functions.
The properties consist mainly of schools and university buildings, as well as administrative buildings of ministries.
As such, BIG’s activity is closely linked to central government administration and state functions, and is therefore
less vulnerable to volatile demand. Although BIG’s stand-alone financials are less sound than those of a comparable private
sector entity, the closeness to the state and state functions strongly mitigates these factors.
Business Franchise
Contact Phone
London
Janne Thomsen 44.20.7772.5454
Gabriele Baur
New York
Yves Lemay
Bundesimmobiliengesellschaft m.b.H.
BACKGROUND
BIG is in charge of the management of the Austrian Republic’s real estate, with a portfolio dominated by schools and
universities (55%) and other administrative buildings (45%). BIG’s activities involve renting out the buildings to the various
government entities, carrying out renovations and new investments and handling possible sales of redundant buildings
and land. BIG’s holdings include a small housing portfolio, comprising mainly the current and former homes of
civil servants and other public sector employees. Finally, BIG offers facilities management if required by the tenants.
BIG consists of the holding company, Bundesimmobiliengesellschaft m.b.h (BIG), and three daughter companies.
The report will focus on the consolidated results.
STATE OWNERSHIP STRONGLY SUPPORTS RATING
The 100% ownership of BIG by the Republic of Austria provides comfort that the owner will:
• support the entity in the event of a problem arising
• continue to be the main tenant of BIG, and hence provide revenue/margin stability
• determine policy (tasks and obligations) of the entity going forward, while taking financial stability into account
• supervise and control the activities of BIG
Ownership can only be reduced below 100% by changing the law pertaining to Bundesimmobiliengesellschaft.
Although this is not impossible, the Austrian state currently has no intention of effecting such a change, as BIG is
regarded as a vital instrument in the management of the state’s properties. Moreover, there are no plans to extend the
entity’s activities to the private sector in a meaningful way. Although commercial property marketing and development
are possible under the BIG law, they are supposed to be of a subsidiary nature. There are currently no plans to expand
commercial activities beyond asset sales of surplus properties and land.
BIG is audited by the Federal Audit Office.

THE PURPOSE OF BIG’S CREATION WAS TO IMPROVE EFFICIENCY
BIG was created by law in 1992 with the objective of centralising the property management of the public sector,
making it more efficient and, more importantly, trying to make the various departments more cost-conscious. The
underlying premise is that if departments had to pay and account for the usage of buildings, space would only be
used if really needed. Thus surplus stock could be put to alternative use or sold off.
BIG NOW OWNS THE PROPERTIES
In the past, BIG used to pay a fee to the state for the “lease” of the buildings. However after the 2000 revision of the
act regulating BIG’s activities, the entity has over the past three years acquired the buildings (in part previously
leased) from the state for an agreed price of €2.4 billion. BIG has financed the purchase via debt. The properties
continue to be let out to the various ministries.
PRICE FOR THE TRANSFERRED ASSETS IS DEEMED FAIR
The sale price of €2.4 billion for the transferred assets seems fair. According to an independent valuation of the
properties by the Technische Universität Wien, the market value is €6.9 billion. The lower transfer value takes into
account the specialist nature of the properties, i.e. possibly a lower re-sale value and future investment needs. If BIG
sells transferred assets in future, and the price is above the purchase price, BIG will need to pay a share of the gain to
the state (i.e. a formulaic calculation of the share, taking into account the gain on disposal), and the equivalent of
about 70% of the capital gain will need to be paid out.
Financial fundamentals
SATISFACTORY 2002 RESULTS
Results for 1H 2003 were satisfactory at €97.3 million after tax (€64.9 million 1H 2002) and compare favorably to
results for 2002 at €60.5 million. The 2002 results were lower due to increased funding costs as BIG’s debt
increased as a consequence of taking over more properties from the central government. The growth in rental
income of 4.5% is satisfactory and in line with budget, given the continued increase in properties owned; whereas
operating costs increased by almost 25% as a result of increased financing costs, again in line with budget.
According to BIG’s budgets, growth in rental income is expected to continue over the next five years, at a total rate
of 8%. Other income continues to be high due to the disposal of properties.
BIG’s management is focused on cost efficiency and project management, and has been successful in keeping
operating costs at an acceptable level. We expect the prudent cost management to be continued. Cost control of
projects is also strict on joint-venture activities in BIG’s daughter companies. Some savings have also taken place
due to reductions in personnel costs, in connection with restructuring of the companies. Operating expenses are
forecast to be quite stable, growing by approximately 3.5% over the budget period. If BIG can contain costs as projected,
this will positively affect levels of operating income, which are due to grow by 15% over the budget period.
Interest expenses are projected to peak between 2004 and 2006, at €170 million a year, and are expected to
fall thereafter as a consequence of reduction in debt levels.
In 2002, BIG paid a dividend of €100 million to its owner, although it would be preferable from a creditor’s
point of view to retain all profits in order to keep gearing lower going forward.
RELATIVELY SECURE TENANTS AND STEADY RENTAL FLOWS
Rental income is the mainstay of BIG’s income. Of this, 90% comprises rents received from the state (ie from various
ministries that use the buildings). The main ministries are the Federal Ministry for Education (60%), Ministry
of the Interior (10%), Ministry of Finance (approximately 10%). Rents are paid quarterly for all properties, whereas
housing rents are paid monthly. There are options for giving notice under the rental agreements; the notice period
is one year for tenants, covering 70% of the total revenue. However, the tenants are deemed to be relatively stable,
since the ministries need the properties as a base from which to provide services such as education. The notice periods
for new projects or major renovations take into account sunken costs and the necessary period for repaying the
debt-financed investment. Such projects usually benefit from a clause that forbids the tenant to give notice during
the debt amortisation period (usually 20-25 years).
2 Moody’s Analysis

RENTAL AGREEMENTS TAKE INTO ACCOUNT A REASONABLE MARGIN AND THE NEED FOR INVESTMENT
Rental rates assume a reasonable margin after running and investment costs. The revised BIG law (29 December
2000) stipulates that BIG has to provide buildings to the state at market prices and, more importantly from our
point of view, only if they are economically viable. Rents have been fixed on a market basis, while taking into
account the relatively specialised nature of the properties, and are indexed to a designated consumer price index with
a year’s lag (currently CPI 1996). Adjustments are only allowed if they are 5% above this index, and the adjustment
will then be in full. As such, the potential for rental increases is not considered to be very flexible.
DEBT HAS NOW REACHED ITS PEAK
BIG’s stock of debt has risen quite rapidly since year 2000 as a result of taking over properties from the central government.
The debt is expected to peak in mid-200 at around €3.0 billion, when the final payment to the government
is to be made. Thereafter, debt is due to fall year-on-year throughout the budget period to reach a level of just
over €3.0 billion in 2010.
The maturity profiles are prudent, with more than 65% of the total stock of debt having more than five
years to maturity and, of the remainder in 2002, an acceptable 7% falling due within one year.
Almost 85% of the total debt is denominated in euros, with the balance in Swiss Francs. Interest rate stability
is afforded by the fact that over 75% of the total stock is in fixed rates. BIG has prudent counterparty guidelines
in place.
Related Research
Analysis:
Austria, Republic of, July 2002 (75399)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this
report and that more recent reports may be available. All research may not be available to all clients.
Moody’s Analysis 3

Bundesimmobliengesellschaft Mbh
Summary Balance Sheet (EUR 000's) 31/12/1998 31/12/1999 31/12/2000 31/12/2001 31/12/2002
Cash & central bank
Due from banks
Securities
Gross loans
Loan loss reserves (LLR)
Fixed assets
Other assets
Total assets
Total assets (USD million)
48,196
0
0
0
0
1,282,624
19,904
1,350,724
1,438,710
12,159
0
0
0
0
1,334,779
39,162
1,386,100
1,382,918
3,502
0
0
0
0
1,976,404
86,374
2,066,280
2,061,536
40
0
0
0
0
2,817,593
127,830
2,945,463
2,938,701
3,675
0
0
0
0
3,614,492
116,316
3,734,482
3,977,747
Demand deposits
Savings deposits
Due to banks
Market funds
Other liabilities
Total liabilities
LT/Subordinated debt
Shareholders' equity
Total capital funds
Total liabilities & capital funds
0
0
76,070
0
247,015
323,085
998,203
29,436
1,027,639
1,350,724
0
0
62,313
0
233,004
295,317
1,039,606
51,177
1,090,783
1,386,100
0
0
327,602
0
135,792
463,394
1,344,963
257,923
1,602,886
2,066,280
0
0
570,641
0
408,731
979,372
1,610,293
355,798
1,966,091
2,945,463
0
0
404,602
0
415,919
820,521
1,547,983
323,161
1,871,144
2,691,665
Derivatives - notional amount
Derivatives - replacement value
Risk weighted assets (RWA)
Contigent liabilities
--
--
--
0
--
--
--
0
--
--
--
0
--
--
--
0
--
--
--
0
Summary Income Statement (EUR 000's)
+Interest income 249,824 260,037 292,927 677,073 697,229
-Interest expense 97,090 102,628 140,128 331,653 416,952
=Net Interest income 152,734 157,409 152,799 345,420 280,277
+Trading income 0 0 0 0 0
+Fees & commissions 0 0 0 0 0
+Other operating income 57 38 156 7,881 6,088
=operating income 152,791 157,447 152,955 353,301 286,365
-Personnel expenses 2,395 2,398 3,142 12,294 13,366
-Other operating expenses 76,887 76,839 69,675 80,311 17,888
= operating funds flow 73,509 78,210 80,138 260,696 255,110
-Amortisation/depreciation 56,419 60,617 64,925 118,871 150,101
=Preprovision income (PPI) 17,090 17,593 15,213 141,825 105,009
-Loan loss provisions (LLP) 0 0 0 0 0
+Other non operating adjustments [1] 413 382 565 354 366
+Extraordinary profit / loss 0 0 0 -11,142 1,116
=Pretax income 17,503 17,975 15,778 131,037 106,492
-Taxes 1,954 3,200 403 47,833 45,970
=Net income 15,549 14,775 15,375 83,204 60,522
-Minority interests 0 0 0 0 0
=Net income (group share) 15,549 14,775 15,375 83,204 60,522
Real Growth Rates (Inflation Deducted) (%)
Liquid assets -- -- -- -- --
Gross loans -- -- -- -- --
Problem loans -- -- -- -- --
LLR -- -- -- -- --
Total assets 4.22 1.91 46.87 39.34 23.94
Customer deposits (demand and savings) -- -- -- -- --
Market funds & due to banks 44.54 -18.65 417.97 70.27 -30.69
Shareholders' equity 122.33 72.65 396.53 34.85 -11.21
Risk weighted assets -- -- -- -- --
Operating Income 48.24 2.33 -4.29 125.79 -20.77
Operating Expenses 43.17 2.34 -2.97 50.08 -16.17
Preprovision Income 106.16 2.23 -14.81 811.3 -27.62
Loan Loss Provisions -- -- -- -- --
Net Income 35.03 -5.64 2.52 429 -28.9
Income Statement in % Average Assets
Operating income 11.57 11.51 8.86 14.1 8.57
Operating expenses 10.28 10.22 7.98 8.44 5.43
Preprovision income 1.29 1.29 0.88 5.66 3.14
Loan loss provision 0 0 0 0 0
Net income 1.18 1.08 0.89 3.32 1.81
Liquidity, Funding & Balance Sheet Composition
Avg. liquid assets % avg. total assets 0 0 0 0 0
Avg. gross loans % avg. total assets 0 0 0 0 0
Avg. customer deposits % avg. total funding 0 0 0 0 0
Avg. interbank funds % avg. total funding 100 100 100 100 100
Avg. market funds (excl. interbank) % avg. total funding 0 0 0 0 0
Avg. liquid assets % avg. customer deposits -- -- -- -- --
Avg. gross loans % avg. customer deposits -- -- -- -- --
Avg. market funds reliance [2] -- -- -- -- --
Avg. RWA % avg. total assets -- -- -- -- --
4 Moody’s Analysis

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Rating History Bonds
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Report Number: 79243
Author
Janne Thomsen
Editor
Patricia Radnor
Associate Analyst
Benjamin Clay
Production Associate
David Ainsworth
© Copyright 2003, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. ALL INFORMATION
CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER
TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY
FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by
MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as
is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or
fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part
caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers,
employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct,
indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such
damages, resulting from the use of or inability to use, any such information. The credit ratings, if any, constituting part of the information contained herein are, and must be construed solely
as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY,
TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR
MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of
any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider
of credit support for, each security that it may consider purchasing, holding or selling. Pursuant to Section 17(b) of the Securities Act of 1933, MOODY'S hereby discloses that most issuers of
debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment of any rating, agreed to
pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,500 to $1,500,000.