Creative capital markets
When logistics corporations need more money, then bonds are one viable way of raising funds. However, if there are radical changes in the ownership structure, repurchasing bonds is also an option.
In the current rather low-interest phase of the economic cycle, investors are particularly interested in financial opportunities that promise satisfactory returns. For firms this means they can obtain capital relatively cheaply through bonds. Such instruments are common among logisticians, as a recent selection shows.
Kuehne + Nagel launched two bonds at the end of May; they are expected to yield CHF 200 million each. The first one has a term of three years and five months and an interest rate of 0.02%. The second bond is more lucrative; it offers an interest rate of 0.2% and a term of six years.
The company, based in Schindellegi (in the Swiss canton of Schwyz), intends to use the expected proceeds of CHF 400 million for general corporate purposes. Chief financial officer Markus Blanka-Graff told the media that “these bonds will enable Kuehne + Nagel to benefit from attractive interest rates and optimise its financing structure. It’s also an additional opportunity to work with the Swiss capital market to support our strategy.”
Ceva buys back bond
Ceva Logistics Finance, which is a subsidiary of Ceva, has chosen the opposite approach to Kuehne + Nagel’s. Ceva, following its acquisition by CMA CGM, has now launched a buyback offer for a bond that is worth EUR 300 million. The bond offers a 5.25% interest rate and is due to mature in 2025. Holders of such bonds can tender their securities to Ceva Finance until 2 July and receive 101% of the purchase price, plus interest.
EUR 5 million for Aves
The volume of a bond launched by Aves Transport recently is somewhat smaller. The subsidiary of the German company Aves One, which leases out railway wagons and related equipment, issued a bond with a volume of EUR 5 million and a minimum subscription of EUR 1,000. The bond matures in July 2024 and bears an interest rate of 5.25%.
Bonds are also suitable instruments with which to finance the construction of rather expensive transport and logistics industry infrastructure.
One example of this approach is the one chosen by the Gabon Special Economic Zone (GSEZ), which issued a USD 57 million bond at the beginning of this year. The GSEZ, which is backed by the state of Gabon, the Africa Finance Corporation (AFC) and the agricultural produce company Olam, has been designed to help develop the country’s overall logistics infrastructure. It focuses particularly on the railfreight sector. The bond runs for ten years and is seen as one positive example of the strength of the local debt capital market.