Yahoo Finance German Agri Firm Scraps Euro Bond as Refinancing Looms
(Bloomberg) -- Germany’s BayWa AG scrapped a euro bond sale Monday, just weeks before one of its existing notes in the currency will mature.
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The issuer, which provides trading and logistics services in the agriculture, building and energy industries, had offered €250 million ($266 million) of five-year notes at a yield of around 6.75%, according to a person with knowledge of the matter, who asked not to be identified as the information is private.
BayWa pulled the deal after an order book of €210 million fell short of its target size, said a separate person familiar. BayWa was also unable to reduce the yield on offer during the book-building process.
The deal had struggled to gain traction in the market, partly because of its smaller size and also because it didn’t come with a credit rating, said the person.
A BayWa spokesperson confirmed the company had pulled the deal, adding it would not comment on the reasons.
The decision not to proceed with the offering comes just two weeks before BayWa can call an existing €500 million note at par, according to data compiled by Bloomberg. The notes’ final maturity date is June 26.
In an investor presentation for its bond sale seen by Bloomberg, the company said it has a “balanced and diversified funding profile” and “no dependency on single lending sources.” When its new bond sale was first mandated last week, the termsheet accompanying the sale said proceeds would “be used for general corporate purposes, including the refinancing of existing debt.”
The 100-year old Munich-based company posted a loss in 2023, citing higher financing costs and taxes, although the firm said it expected its earnings to improve in 2024.
The scrapped offering is the first in Europe’s publicly-syndicated debt market since March 20, when Equinix Inc. and Raiffeisen Bank International AG both opted out of proceeding with deals. Equinix cited a short-seller report for its decision to stand down, while Raiffeisen delayed the sale of AT1 securities after a report cast doubt on its plan to repatriate profits from its Russian unit.
Click here for a worksheet of delayed/pulled transactions this year.
--With assistance from Colin Keatinge and Libby Cherry.
(Updates with detail throughout)
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