Richemont Places Its First Euro Bond, Worth 3.75 Billion

Compagnie Financière Richemont said Thursday it has successfully placed its inaugural euro-denominated bond of 3.75 billion euros ($4.61 billion) following a road show with fixed-income investors across Europe.

The net proceeds from the issue of the notes will be used for the group’s general corporate purposes and may fund the acquisition of the ordinary shares of Yoox Net-a-Porter Group, in whole or in part, pursuant to the YNAP voluntary public tender offer.

As reported this year, Richemont announced its intention to buy all the ordinary shares of Yoox Net-a-Porter Group SpA at 38 euros per share for a value of up to 2.77 billion euros. Richemont’s plan is to acquire 51 percent of the YNAP shares it does not already own. The deal is expected to close this summer.

The euro bond transaction launched on March 15 with three tranches maturing in 2026, 2030 and 2038. The notes are priced with a coupon of 1 percent for the 1.5 billion euros, eight-year maturity note; 1.5 percent for the 1.25 billion euros, 12-year note; and 2 percent for the 1 billion-euro 20-year note.

The notes are expected to receive a rating of A+ (stable) in line with the rating assigned to Compagnie Financière Richemont SA by S&P Global Ratings. Richemont said it would make an application for the notes to be listed on the regulated market of the Luxembourg Stock Exchange.

Johann Rupert, chairman of Richemont, said the bond transaction “positions Richemont with European bond investors for the first time. We are pleased with the support the inaugural bond issue has received from investors, which demonstrates confidence in the quality of our assets and strength of our balance sheet.

“In line with Richemont’s prudent balance sheet policy, we have taken advantage of the low-interest-rate environment to raise long-term debt. We will use the funds to invest in the development of our businesses.”

As reported this week, Consob, the Italian stock market regulator, approved the offer document related to Richemont’s voluntary public tender offer for all the issued, and to be issued, ordinary shares of YNAP. The offer document will be published on Richemont’s website on March 18, and the acceptance period will open a day later.

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