HeidelbergCement's refinancing for Italcementi acquisition reduced

HeidelbergCement's refinancing for Italcementi acquisition reduced
22 March 2016

HeidelbergCement priced a eurobond issue under its EUR10bn Euro Medium Term Note (EMTN) programme with an issuance volume of EUR1bn and a maturity date of 30 March 2023. The bond was issued at the upper end of the volume and the lower end of the coupon range. Demand was very high, said HeidelbergCement. The bond was more than three times oversubscribed.

The proceeds will be utilised for general corporate purposes and especially to prefund the upcoming Italcementi acquisition. Thereby the volume of the bridge financing will be reduced from EUR2.7bn to the minimum volume required for the mandatory takeover offer of EUR2bn. The refinancing needs in the bond market decline to below EUR1bn in line with the issuance volume.

The seven-year bond bears a fixed coupon of 2.25 per cent per annum. The issue price is at 99.616 per cent, resulting in a yield to maturity of 2.31 per cent. The main underwriters of the transaction are Bank of America Merrill Lynch, Commerzbank, ING, Morgan Stanley (B&D) and Nordea.

As already communicated in the announcement of the Italcementi acquisition, the bridge financing should be refinanced by free cash flow, the sale of production sites and the issuance of bonds.

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