Strong interest in new H&M bonds, 500 million euros raised
H&M Group has issued new bonds for the first time in two years. This secured the group long-term financing and raised 500 million euros. Investor interest was high, with demand seven times higher, the group reports.
A bond is a loan a company takes out from investors. This money is repaid at a later date. By issuing bonds, a company can obtain funds for expansion; financing projects; or repaying existing debts. The issuer of the bond also often pays interest to the investor.
Bonds can also be traded on the bond market. Investors can therefore sell them before the issuer's repayment term has expired.
The bond issued by H&M Group has a maturity of 8 years and an interest rate of 3.4 percent. The bonds must be repaid to investors by 2033 at the latest.
Although bonds worth 500 million euros were to be issued, there was interest amounting to 2.4 billion euros. In practice, this means that not everyone who wanted to acquire a bond received one. H&M Group has not disclosed how the bonds were allocated. It is also not known which parties are among the investors.
“We are pleased with the broadening of our investor base, including several leading investors and with strong geographical diversification. The high oversubscription of our bond clearly shows that investors appreciate our steps towards our long-term vision,” said Adam Karlsson, CFO of H&M Group, in the statement.
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