le Groupe Barry Callebaut announced the successful placement of its second debt funding (called Schuldscheindarlehen) in two years using a financial debt instrument similar to a promissory note.
The company has raised a total of CHF 450 million (US $492.7 million). The weighted average tenor (maturity of the note) is 6.9 years, with a weighted average interest rate of 1.68%.
The offer was clearly attractive as it became heavily oversubscribed, with German and Asian banks, and also a broad range of other European banks participating.
We are pleased with the very significant interest of international investors in our offering. This issuance means a further shift from uncommitted to committed funding sources through which we emerge from the COVID-19 crisis with a further strengthened balance sheet.Remco Steenbergen, Chief Financial Officer of the Barry Callebaut Group
The income is allocated to general corporate purposes. Barry Callebaut wanted finance to boost the company’s long-term liquidity by extending the average maturity at record low interest rates and reduce its reliance on short-term funding sources.
In plain English, this means they see the low-interest rates right now as a very attractive way to finance the business over the long term and avoid repeated rounds of short term financing at potentially less attractive rates.
Landesbank Baden-Württemberg, Cooperatieve Rabobank U.A. (in cooperation with Raiffeisen Bank International AG), Société Générale and SEB AB Frankfurt Branch arranged the offering.
Barry Callebaut issued its first promissory note loan in February 2019. At that moment, the EUR 600 million equivalent of the promissory note loan was the largest made in CHF.