Danish Crown: Successful bond sale

Two hours before closing, the banks reported Danish Crown's new corporate bond sold out.

Monday 5 November 2012 (6 years 2 months 17 days ago)

Danish CrownThe bond sale attracted so much interest that not all investors received bonds for the amount they wanted to invest.

- We knew ahead of time that the interest was there, but that is no guarantee that investors will actually buy the bond. It is therefore very nice to see such a broad circle of investors showing faith in Danish Crown and being willing to lend our company money, says a happy Preben Sunke, Group CFO.

Prior to the bond sale, Danish Crown had announced that the aim was to sell bonds for between DKK 500 million and DKK 750 million. It became clear as early as Thursday that the bond issue would be a success. In the late afternoon, Danish Crown's advisory banks SEB and Nykredit had already received orders for more than DKK 0.5 billion.

- We are very pleased with this transaction, which attracted strong interest among a broad group of investors as soon as the investor meetings in Copenhagen and Horsens were announced, says Jan K. Villadsen, Senior Vice President at Nykredit Markets.

Peter Røder Lauridsen, Head of Trading & Capital Markets at SEB Merchant Banking Denmark, concurs and explains:

- The group of investors comprises 73 investors distributed on all investor types.

We see this as clear evidence of the positive credit history which Danish Crown is bringing to the market.

Danish Crown has elected to issue a corporate bond rather than borrow the funds from the bank, which reflects Danish Crown's strategic decision to prioritise broadly based funding.

At the same time, Nasdaq OMX in Copenhagen is launching a new trading platform for corporate bonds, and Danish Crown has agreed to have its new corporate bond listed on the stock exchange which will be known under the name First North Bond Market. For several reasons, it was therefore an obvious time for Danish Crown to sell bonds.

- We would like to support the trading platform which Nasdaq OMX is now establishing as it may turn into a huge asset in the long term – not just for Danish Crown, but for a large number of companies in Denmark. At the same time, it is also a bonus if the price of borrowing money through the sale of bonds is competitive with the alternatives – and it is, says Preben Sunke.

Danish Crown pays a floating rate on the bond loan, calculated as the three-month interest rate (CIBOR) plus 1.75%, which currently corresponds to an interest rate of just over 2%.

October 26, 2012 - Danish Crown

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