MOSCOW (MRC) -- On June 5, 2020, Covestro successfully placed a Eurobond with a total volume of EUR 1.0 billion in the capital markets, said the company.
The bond was issued in two tranches maturing February 2026 and June 2030 and pays a coupon of 0.875% and 1.375% respectively. Investor demand was exceptionally high with the orderbook being more than 10 times oversubscribed.
The transaction allows Covestro to extend the average maturity of its bonds substantially. Proceeds of the bond placement will be used to further strengthen Covestro's liquidity in the current macroeconomic environment with the impact of the coronvirus pandemic, as well as providing funds for the 2021 bond maturity.
“The exceptional demand from investors for our bond clearly demonstrates that even in these challenging times, the capital market has continued confidence in Covestro and our robust financial policies”, said CFO Dr. Thomas Toepfer. “The placement of EUR 1.0 billion Eurobond with long-dated maturities is part of our program to build substantial liquidity reserves whilst capturing attractive terms and pricing.”
Covestro was supported on this issuance by BNP Paribas, Bank of America, Commerzbank, and UniCredit as bookrunners.
As MRC informed earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.
According to MRC's ScanPlast report, overall estimated consumption of PC granules totalled 12,600 tonnes in the Russian market in January-February 2020 (excluding imports and exports to/from Belarus), compared to 9,600 tonnes a year earlier. Demand increased by 31%.
Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2018 sales of EUR 14.6 billion, Covestro has 30 production sites worldwide and employs approximately 16,800 people (calculated as full-time equivalents) at the end of 2018.
MRC