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 2020:
|CHF instruments||Nominal Value|
|Straight bond (2012-2022)||105|
|Straight bond (2016-2021)||250|
|Straight bond (2015-2023)||175|
|Straight bond (2017-2021)||125|
|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.
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 new bond with a volume of EUR 500 million has a maturity of seven years. The notes have been offered under a standalone Prospectus and are 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 500m and USD 200m carrying floating interest rates and initially repayable in 2020, 2024 and 2025 respectively. The proceeds have been used to replace existing finances 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, 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 effectively replaced the RCF of CHF 700 million issued in 2017. The facility was not used as of 31 December 2020 (2019: CHF 80 million and USD 65 million). RCF was extended in 2020 according to its extension option by one year.
German private placement (Schuldscheindarlehen)
The 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 single-tranche German private placement (Schuldscheindarlehen) of USD 100 million carry floating interest rates (LIBOR + margin) and is repayable in 2024.
Other current and non-current debt compromise industrial revenue bonds of CHF 134 million equivalent issued by governmental institutions in the United States (repayable in 2022, 2025, 2030 and 2047). In November 2020 Lonza repaid its maturing bond of USD 34 million.
|Average interest rates %||%||million CHF||Average interest rates %||%||million CHF|