BNP Paribas and LBBW arranged the deal for Bosch, which has an A+ rating from Standard & Poor’s. Investors were offered tenors ranging between two and 20 years. The final size was €2bn.
“It’s a remarkable amount, when you consider the state the world is in,” said one Schuldschein investor, who added that it shows buyers are still keen to invest in the right credits. The only other company to issue €2bn-plus is ZF Friedrichshafen, which issued a €2.2bn Schuldschein in November 2014 and a €2.1bn deal late last year.
In an emailed statement to GlobalCapital, Robert Bosch’s chief financial officer, Stefan Asenkerschbaumer, said: “In this global coronavirus crisis, financial safeguards are important for the Bosch Group’s viability and independence. The speed with which the borrower’s note was taken up in such challenging times is a clear expression of confidence in the company’s ability to deliver.”
| Tenor | Pricing range* |
| 2 years | 85bp-95bp |
| 3 years | 95bp-115bp |
| 5 years | 120bp-140bp |
| 7 years | 140bp-160bp |
| 10 years | 160bp-180bp |
| 12 years | 175bp-185bp |
| 15 years | 185bp-195bp |
| 20 years | 195bp-205bp |
| * over 6 month Euribor for floating rate, over mid-swaps for fixed | |
In a later email statement, Bosch said: “Despite the currently volatile state of the financial markets, Bosch attracted many investors from within and outside Germany. They mainly include banks, savings and loan associations, and other institutional investors.”
Deals in the Schuldschein market very rarely price outside of the margin ranges.
“Clearly, when a company starts with €500m and it quadruples in size, they wouldn’t price it there if it wasn’t within the term sheet range,” said a senior Schuldschein banker.
Why Bosch was prepared to issue a Schuldschein at these margins, when a single-A rate European borrower could receive more attractive pricing in the bond market, is a question that several Schuldschein players have asked.
“If you want to do a bond, you have to have a running MTN programme or run a standalone process,” said the senior Schuldschein banker. “It involves public disclosure and some form of debt investor relations. You have to remember, Bosch is a family-owned company, albeit a massively big one.”
Robert Bosch has previously said automotive production would drop by at least 20% in 2020. In a bid to cut its overheads during this period, Bosch has said half of its staff are working reduced hours and senior staff are taking a 20% pay cut in April and May. It signed a new €3bn revolver at the end of April with a syndicate of 14 banks.