Akzo Nobel has launched a benchmark euro-denominated public bond for an amount of EUR 650* million.
The sale of the bonds—which is being managed by Deutsche Bank and Citigroup—will help to repay the company’s maturing debt.
Frits Hensel, Akzo Nobel’s executive vice-president of finance, said that the company has about EUR 700 million of debt due for repayment this year and the eight-year bond will substantially improve the debt maturity schedule of the existing long-term debt.
Akzo Nobel borrowings that mature this year include a USD 500 million bond sold in 1998 to finance the purchase of UK company Courtaulds, due in November. An NLG 300 million (EUR 136 million) bond from 1993 is also due to be repaid in October.
The company has been informing investors of the bond sale through conference calls, rather than embarking on a roadshow. “We’re not doing this because the market is so hot at the moment that the banks are saying a roadshow wouldn’t add anything,” explained Hensel.
He added that the bonds, listed at Euronext Amsterdam, will be “plain vanilla,” without put or call options and with a fixed interest coupon of 4.25 percent.
(Released: June 4, 2003)
*Update: The amount of the bond was increased to EUR 750 million on June 10.