PPF Telecom Group, which belongs to the realm of PPF, the richest Czech Petr Kellner, has announced the successful issue of half-billion bonds in euros. Investors from Britain (33%), Germany (27%), France (13%) or Switzerland (7%) bought seven-year bonds for 13.5 billion crowns.
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Demand was so high that the group could eventually reduce the interest it will pay bondholders. From the originally expected 3.5 percent, the annual return for investors became 3.375 percent.
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“Our fourth issue has met with strong support from a diversified group of international investors over the past eighteen months. All net proceeds from these bonds will be used to repay PPF Telecom Group’s existing bank loans, “said Kateřina Jirásková, CFO of the PPF Group. At the same time, the issue of bonds once again extended the maturity of large loans of the telecommunications group.
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Petr Kellner, as well as other richest businessmen doing business in the Czech Republic, understand that in uncertain times it is more advantageous to borrow through a bond for a stable business than with bank loans. Simply put, the point is that if a company fulfills the promised conditions vis-à-vis bondholders, ie repays it in the first place, such a loan is given and unchangeable. On the other hand, in more difficult times, banks often try to obtain various types of additional collateral for their clients from already issued loans, or they may push for more expensive credit lines.
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Remon Vose’s CTP is also preparing bonds
Radovan Vítek, the second richest Czech and the ruler of the CPI Property Group, which publishes even more advantageous, so-called green bonds, also knows this well. Remon Vos, the owner of the CTP group, which builds and leases industrial parks, came up with the same intention last week. His company grew up in the Czech Republic, but today it is active throughout Central Europe.
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“In the event of a favorable market climate, CTP plans to issue senior unsecured fixed-income bonds in a reference volume. The bonds are likely to take the form of so-called green bonds, which underlines CTP’s focus on sustainability. The company will use the net proceeds from the issue to refinance existing secured debt and finance future development, “said a statement published by Remon Vos, who lives in the Czech Republic and would be among the ten richest domestic businessmen if he did not keep his Dutch passport.
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Further bond issues coming from sectors that have been little affected by the coronavirus crisis can be expected. The demand from investors who are looking for returns and at the same time limited risk is high.
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