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Kering launches 1.2 billion euro bond issue

By Danielle Wightman-Stone

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French conglomerate Kering has launched a 1.2 billion euro dual-tranche bond, after the luxury group reported that group revenue fell by 15.4 percent in the first quarter as a result of the coronavirus pandemic.

Kering, whose portfolio includes Saint Laurent, Gucci, Balenciaga, Bottega Veneta and Alexander McQueen, said the bond issue enables the luxury group to “diversify its sources of financing and to enhance its funding flexibility through refinancing of existing debt and extension of their average maturity”.

The bond will be issued in two tranches, each worth 600 million euros. The first will mature in three years with a 0.25 percent coupon, and the second in eight years with a 0.75 percent coupon, stated Kering in a statement.

Kering added that this bond issue with investors “confirms the confidence of the market in the creditworthiness of the Group,” as the conglomerate’s long-term debt is rated ‘A’ with a stable outlook by Standard and Poor’s.

The bond issue is managed by Crédit Agricole CIB, HSBC, BNP Paribas, Natixis, Société Générale, UniCredit and Mitsubishi UFG.

In April, following the Q1 results, François-Henri Pinault, chairman and chief executive of Kering, said: “After a very promising start to the year for all our houses, the rapid spread of Covid-19 affected our performance in our main markets. We are working hard on ensuring the continuity and readiness of all our businesses. Adapting our cost base and preserving our cash position are top priorities, implemented at all levels of the group.

“Our solid financial structure and our agility serve us well in this difficult period. My confidence in Kering’s future lies in the strength and values of our houses, which will all emerge from this period of uncertainty at the top of their game, as well as in our ability to blend long-term vision with near-term imperatives.”

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