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 2021:
|CHF instruments||Nominal Value|
|Straight bond (2012-2022)||105|
|Straight bond (2015-2023)||175|
|Straight bond (2017-2024)||110|
|Straight bond (2020-2023)||300|
|Straight bond (2020-2026)||150|
|EUR instruments||Nominal Value|
|USD instruments||Nominal Value|
|Term Loan (2019-2025/2026)||700
S&P credit rating
In January 2019, Lonza announced that Standard & Poor’s (S&P) rated the company with an investment grade rating of BBB+ and stable outlook. The rating has been confirmed by S&P since then and Lonza is committed to maintaining a strong investment-grade rating going forward.
Following the successful closing of the transaction to sell the Lonza Specialty Ingredients business and the receipt of the disposal net proceeds in July 2021, Lonza did not issue any new bonds or other debt securities in 2021. Furthermore Lonza repaid its scheduled debt maturities in 2021 totaling CHF 727 million equivalent (thereof CHF 352 million related to the Schuldschein and CHF 375 million related to the Swiss bonds). Furthermore, Lonza decided to early repay floating rate Schuldschein notes totaling CHF 432 million equivalent.
In April 2020 Lonza issued its inaugural Eurobond with a coupon of 1.625% in the European capital market. The net proceeds were used to refinance existing debt and general corporate purposes. The bond with a volume of EUR 500 million has a maturity of 7 years. The notes have been offered under a standalone Prospectus and have been listed on the Luxembourg Stock Exchange.
CHF - Bond
In 2020, Lonza issued two additional CHF-Bonds. In April 2020 a CHF 300 million note with a maturity of 3 years and an annual coupon of 1.000% followed by a CHF 150 million note with a maturity of six years and an annual coupon of 0.35% in September. The net proceeds were used for refinancing and general corporate purposes.
Syndicated Loan Facilities
In 2019, Lonza signed a Syndicated Loan Facility with a consortium of banks containing Term Loans and a Revolving Credit Facility.
With the agreement Lonza issued Term Loan tranches of EUR 500 million, USD 500 million and USD 200 million carrying floating interest rates and initially repayable in 2020, 2024 and 2025 respectively. The proceeds have been used to replace existing facilities at favorable market conditions. In April 2020 the Term Loan of EUR 500 million has been successfully refinanced with a 7 year Eurobond. In June 2020, Lonza successfully extended its USD Term Loans by 1 year.
The Revolving Credit Facility (RCF) provides Lonza additional financial headroom of CHF 1 billion, initially due 2024, at floating interest rates. The facility was not used as of 31 December 2021 (in 2020, the facility was not used either). Lonza successfully drew its extension option in 2020 and 2021, therefore the RCF was extended by 2 years in total with a final maturity date in 2026.
German private placement (Schuldscheindarlehen)
Following the repayment of the scheduled debt maturities of EUR 325 million (equaling to CHF 352 million equivalent) in August and the early repayment of the floating rate notes of USD 250 million and EUR 187.5 million in August and September 2021 (totaling CHF 432 million equivalent), Lonza maintains two fixed rate notes of the dual-currency Schuldschein issued in August 2017. Remaining notes are repayable in 2023 (EUR 187.5 million) and 2024 (USD 50 million).
Other current and non-current debt compromise industrial revenue bonds of USD 152 million issued by governmental institutions in the United States (repayable in 2022, 2025, 2030 and 2047).
|Average interest rates %||%||million CHF||Average interest rates %||%||million CHF|