Debt Overview

This section offers some important information for debt investors. The ability to flexibly use different sources of funds plays a key role in the financing of the Lonza Group. Lonza has therefore established a number of debt instruments.  

Significant Debt Instruments as of 31 December 2017 

CHF instruments

Nominal Value

Straight bond (2011-2018)     140
Straight bond (2012-2018)     200
Straight bond (2012-2022)     105
Straight bond (2013-2019) 300
Straight bond (2015-2020) 150
Straight bond (2016-2021) 250
Straight bond (2015-2023)   175
Straight bond (2017-2021) 125
Straight bond (2017-2024) 110
Syndicated Loan (2016-2022) 230
   
EUR instruments
 
Term Loan (2017-2020)
225
Term Loan (2017-2022)  225
Schuldscheindarlehen (2017-2021)
325
Schuldscheindarlehen (2017-2023)
375 
   
USD instruments
 
Term Loan (2017-2020)
244
Term Loan (2017-2022)
244
Schuldscheindarlehen (2017-2022)
150
Schuldscheindarlehen (2017-2024)
50
Schuldscheindarlehen (2017-2024)  100
Others
187

                                                                                                                  

Lonza’s Investment Grade Rating Maintained Post FY 2017 Results

Following Lonza’s full-year 2017 results presentation on 31 January 2018 a number of the leading Swiss  banks have re-evaluated Lonza’s investment rating. Following their analysis, the banks came to the conclusion that Lonza’s investment grade rating should be maintained. At the end of 2017 the Company’s net debt amounted to CHF 3,762 million, giving a debt-equity ratio of 0.60 and a pro-forma net debt/CORE EBITDA ratio of 2.65x.

Prospectus for Straight Bond 2011-2018 | PDF

Prospectus for Straight Bond 2012-2018 | PDF

Prospectus for Straight Bond 2012-2022 | PDF

Prospectus for Straight Bond 2013-2019 | PDF

Prospectus for Straight Bond 2015-2020 | PDF

Prospectus for Straight Bond 2016-2021 | PDF

Prospectus for Straight Bond 2015-2023 | PDF

Prospectus for Straight Bond 2017-2021 | PDF 

Prospectus for Straight Bond 2017-2024 | PDF  

 

Acquisition Bridge Financing

The acquisition of Capsugel was financed with a combination of debt and equity financing. Lonza had committed debt financing (bridge financing) for the full acquisition amount of USD 5.5 billion from Bank of America Merrill Lynch and UBS, of which USD 1,457 million was raised in July 2017. The net proceeds of the bridge financing received in 2017 amounted to CHF 1,380 million after considering up-front fees of CHF 19 million (an additional CHF 18 million was paid in 2016). The bridge financing was fully repaid in 2017.


Term Loans

Lonza issued term loans of EUR 450 million and USD 489 million tranches carrying fixed interest rates and repayable in 2020 and 2022 (EUR 225 million and USD 245 million at the first maturity date), respectively. The net proceeds of the two term loan tranches received in 2017 totaled CHF 955 million.   

Syndicated Loan

In 2017 Lonza signed a new syndicated loan with a consortium of banks on the following terms: Credit facility of CHF 700 million, of which CHF 230 million was used as of 31 December 2017, due 2022, at floating interest rates (based on LIBOR). The net proceeds of the syndicated loan facility amount to CHF 225 million. The syndicated loan agreement contains a financial covenant that is based on Lonza’s net debt / EBITDA ratio. The Group was in compliance with the covenant as of 31 December 2017.



Schuldscheindarlehen (Issued in 2017)

Dual-currency Schuldscheindarlehen of EUR 700 million and USD 200 million tranches carry fixed and floating interest rates (LIBOR / EURIBOR + margin) respectively, and are repayable in 2021 (EUR 325 million), 2022 (USD 150 million), 2023 (EUR 375 million) and 2024 (USD 50 million). The net proceeds of the German private placement tranches totaled CHF 986 million.
Single-tranche Schuldscheindarlehen of USD 100 million carrying floating interest rates (LIBOR + margin) and repayable in 2024. The net proceeds amount to CHF 99 million.

Others

Other debt comprises industrial revenue bonds of USD 187 million (2016: USD 142 million) issued by governmental institutions in the United States (repayable in 2020, 2022, 2025, 2030 and 2047). The private placement of senior notes amounting to USD 158 million with certain institutional investors was repaid in 2017.

 

 

Breakdown of Total Debt by Currencies:

    2017     2016 
  Average interest rates     Average interest rates    
  %
 %  million CHF %  % million CHF
CHF  1.42  45  1 927
1.41 80 1 494
EUR  1.15 32 1 343 2.12 2 37
USD  2.57 23

976

2.63 18 327
Other  0.00 0 0 0.00 0 0
Total    100  4 246    100  1 860

 

Average interest rates
 million CHF