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 2018 

CHF instruments

Nominal Value

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 (2017-2023) 195
   
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
Syndicated Loan (2017-2023)  65
Others
387

                                                                                                                  

Initiation of S&P Credit Rating

Lonza announced the initiation of a public credit rating with Standard & Poor’s (S&P), which resulted in a BBB+ rating with stable outlook. Lonza is committed to maintaining an investment-grade rating going forward.

 

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  

 

Term Loans

In 2017, Lonza issued term loans of EUR 450 million and USD 489 million tranches carrying floating 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.  

 

German Private Placement (Schuldscheindarlehen)

  • Dual-currency German private placement (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 in 2017 totaled CHF 986 million.
  • Single-tranche German private placement (Schuldscheindarlehen) of USD 100 million carrying floating interest rates (LIBOR + margin) and repayable in 2024. The net proceeds in 2017 amounted to CHF 99 million. 

 

Syndicated Loans

In 2017 Lonza signed a syndicated loan with a consortium of banks on the following terms: Credit facility of CHF 700 million, of which CHF 259 million was used as of 31 December 2018 (2017: CHF 230 million), due 2023, at floating interest rates (based on LIBOR). The syndicated loan agreement contains a financial covenant that is based on Lonza’s net debt / EBITDA ratio. The Group was released in 2018 from this covenant as the net debt / EBITDA ratio fell below a defined threshold.

 

Others

Other non-current debt comprises industrial revenue bonds of USD 187 million issued by governmental institutions in the United States (repayable in 2020, 2022, 2025, 2030 and 2047) and a bank loan of USD 200 million, repayable in 2024. The private placement of senior notes amounting to USD 158 million with certain institutional investors was repaid in 2017. 

 

Acquisition Bridge Financing

The 2017 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 and consequently the related up-front fees of CHF 37 million were recorded in the income statement.

 

Breakdown of Total Debt by Currencies:

    2018     2017
  Average interest rates     Average interest rates    
  %
 %  million CHF %  % million CHF
CHF  1.32  38 1 531
1.42 45 1 927
EUR 1.04 32 1 295 1.15 32 1 343
USD 3.03 30

1 236

2.57 23 976
Other  0.00 0 0 0.00 0 0
Total    100  4 062    100 4 246

 

Average interest rates
 million CHF