præsentatin til danish farmers abroad€¦ · zürich, hamburg, frankfurt may 2017 april 2017 sole...
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Private & confidential
Præsentatin til Danish Farmers Abroad
VIRKSOMHEDSOBLIGATIONER SOM FINANSIERINGSKILDE Hvorfor og hvornår kan det være relevant for en DFA landbrugsvirksomhed? 12. juni 2018
Private & confidential
2
Agenda
1. Introduction to Pareto Securities
2. Evolution of the Nordic bond market
3. When and why is the bond market relevant?
4. The investors
5. Process and costs
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3
Supported by expertise in shipping, offshore, real estate and more
The Group
Ship and Offshore Broking
P.F. Bassøe Wet Cargo Shipping
Chartering, Research
Pareto Offshore Offshore Drilling Rigs
Chartering, SNP
Pareto Shipbrokers Offshore and Tankers
Chartering, SNP
Pareto Dry Cargo Dry Bulk Shipping
Chartering
Pareto Securities
Sales and Trading Equities
Fixed Income Bank Syndication
Corporate Finance M&A
Equity, Bond & Debt Restructuring
Research Equity & Credit Research
Project Finance Asset Syndication
Shipping & Offshore Real Estate
Asset Management Shipping & Offshore
Real Estate Funds Investor Services
Asset and Wealth Management
Pareto Alternative Investments
Shipping & Offshore Real Estate
Pareto Wealth Management
Pareto Business Management
Shipping & Offshore Real estate
Pareto Bank* Conventional Banking
Services Shipping/offshore,
Real Estate, Securities
Banking and Insurance
Pareto Insurance Broking
Injury, Life and Pension Insurance
Pareto Securities represents the investment banking part of the Pareto Group and is also the largest part of the Group with ~410 employees
The Pareto Group was established in 1986 as a partnership 100% owned by the employees
The Group has ~600 professionals providing investment banking, brokering, traditional banking and advisory services
Focus on shipping, offshore and real estate
Note(*): 15% owned by Pareto AS
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Equity sales & trading
Equity issuance, listed and non-listed
Block sales, buybacks and strategic acquisitions
Equity Capital Markets
~70 professionals in the Nordics, UK, US and
Singapore
Debt sales & trading
Bond, convertible and hybrid capital issuance
High yield and investment grade
FX trading & advisory
Debt Capital Markets
~60 professionals in the Nordics, UK, US, Germany, Switzerland and Singapore
Sale & purchase of offshore rigs
Newbuilds and second-hand
Rig charter
Asset & Contract Brokerage
~5 professionals in Norway
Mergers, acquisitions and divestments
Initial Public Offerings
Equity and debt capital raising
Debt and restructuring advisory
Financial and strategy advisory
Corporate Finance & Advisory Services
~80 professionals across 11 countries world wide
Equity and credit research
Investment strategy
Macro and industry research
Corporate access
Research
~40 professionals in Norway, Sweden and UK
Project finance and asset syndication
Shipping/offshore
Real Estate
Sales & secondhand trading in projects
Business mgmt.
Maritime services
Project Finance
~80 professionals in the Nordics
Complete investment bank service offering
Pareto Securities is an independent full service investment bank with ~410 employees located in 15 offices across 11 countries
In addition, ~75 employees provide global support and back-office services
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International presence creating a global variety of transactions
Perth
Nordics: Oslo, Stockholm, Copenhagen, Helsinki, New York
Singapore
Stavanger, Malmö
London
Pareto office
Paris
Americas deals EMEA deals Asia & Oceania deals
Houston
Zürich, Hamburg, Frankfurt
May 2017
Sole Lead Manager
5 year senior secured bond
USD 410m
April 2017
Sole Financial Advisor
Advisor to City of Oslo in the acquisition of
Hafslund, and subsequent sale of assets
NOK 47,750m
June 2017
Left Lead Manager
4 year senior secured bond
USD 300m
June 2017
Joint Bookrunner
IPO of SpareBank 1 Østlandet
on Oslo Børs
NOK 2,400m
Sole Lead Manager
June 2017
5 year senior secured bond
USD 100m
August 2017
Sole Lead Manager
5 years senior secured bond
EUR 350m
December 2017
Sole Financial Advisor
Advisor to Songa in Transocean’s acquisition
of the company
NOK 26,000m
December 2017
Joint Lead Manager
AUD 400m
22 year senior secured USPP bond
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Pareto has raised more than DKK 50bn through 76 transactions in 2017
March 2017
Co-Manager
5 year senior unsecured bond
USD 250m
April 2017
Sole Lead Manager
4 year senior secured bond
EUR 210m
April 2017
Sole Lead Manager
10 year senior secured bond
EUR 58m
Maritime company
May 2017
Sole Lead Manager
10 year senior secured bond
NOK 305m
Ski Eiendomsinvest AS
May 2017
Sole Lead Manager
2 year senior unsecured PIK
USD 81m
May 2017
Sole Lead Manager
5 year senior secured tap
EUR 51m
Jacktel AS
March 2017
Joint Lead Manager
4 year senior secured bond
SEK 300m
May 2017
Sole Lead Manager
4 year senior secured bond
EUR 135m
March 2017
Joint Lead Manager
5 year senior unsecured bond
NOK 800
March 2017
Joint Lead Manager
4 year senior secured bond
NOK 500m SEK 207m
May 2017
Sole Lead Manager
5 year senior secured bond
USD 410m
June 2017
Joint Lead Manager
6 year senior unsecured bond
NOK 500m
June 2017
Sole Lead Manager
5 year senior secured bond
USD 100m
June 2017
Joint Lead Manager
4 year senior secured bond
SEK 500m
June 2017
Sole Lead Manager
5 year senior secured bond
SEK 220m
BMST Intressenter AB
June 2017
Sole Lead Manager
4 year senior unsecured bond
EUR 15m
June 2017
Left Lead Manager
4 year senior secured bond
USD 300m
May 2017
Sole Lead Manager
7 year senior secured bond
NOK 105m
Klæbuveien 196A AS
June 2017
Sole Lead Manager
10 year senior secured bond
SEK 840m
Kalmar Eldaren AB
May 2017
Sole Lead Manager
3 year senior secured bond
SEK 600m
June 2017
Sole Lead Manager
3 year senior unsecured bond
SEK 500m
June 2017
Sole Lead Manager
2 year senior unsecured bond
USD 10m
Bassdrill Alpha Ltd
February 2017
Joint Lead Manager
5 year senior unsecured bond
USD 220m
February 2017
Sole Lead Manager
4 year senior secured tap
USD 40m
February 2017
Joint Lead Manager
4 year senior unsecured bond
USD 100m
March 2017
Joint Manager
Perpetual Restricted Tier 1 NC5 bond issue
NOK 350m
February 2017
Joint Lead Manager
4 year senior unsecured bond
USD 250m
March 2017
Sole Lead Manager
4 year senior secured bond
SEK 500m
March 2017
Sole Lead Manager
5 year senior unsecured bond
USD 175m
January 2017
Joint Lead Manager
3 year senior secured tap
SEK 170m
March 2017
Joint Lead Manager
4 year senior secured bond
EUR 115m
January 2017
Sole Manager
5 year Secured Amortising Notes
USD 500m
Oilflow SPV1 DAC
February 2017
Joint Lead Manager
4 year senior secured bond
NOK 850m
March 2017
Joint Manager
30 year Subordinated Tier 2 NC5 bond issue
NOK 400m
October 2017
Sole Lead Manager
5 year senior unsecured bond
NOK 850m
November 2017
Joint Lead Manager
3 year senior secured bond
USD 120m
November 2017
Sole Lead Manager
4 years senior unsecured bond
SEK 325m
November 2017
Sole Lead Manager
9 years senior secured bond
NOK 715m
Forskningveien Holding AS
October 2017
Sole Lead Manager
5 year senior secured 5.25 year 2nd Lien
NOK 1,000m NOK 350m
November 2017
Sole Lead Manager
4 years senior secured bond
EUR 60m
November 2017
Joint Lead Manager
9 years senior secured bond
SEK 750m
October 2017
Sole Lead Manager
5 years senior secured bond
DKK 275m
November 2017
Co-Manager
6 years senior unsecured bond
USD 100m
October 2017
Sole Lead Manager
3 years senior secured bond
SEK 150m
November 2017
Joint Lead Manager
5 years senior secured bond
USD 150m
August 2017
Sole Lead Manager
1.4 year 1st lien secured bond
DKK 95m
August 2017
Sole Lead Manager
1.5 year 2nd lien secured bond
DKK 85m
August 2017
Sole Manager
5 years senior secured bond
EUR 350m
August 2017
Joint Manager
Hybrid Tier 1 & Tier 2 bond issue
NOK 50m NOK 50m
July 2017
Joint Lead Manager
5 year senior secured bond
USD 300m
September 2017
Sole Manager
4 years senior secured bond
SEK 375m
Logistri Fastighets AB
October 2017
Joint Lead Manager
4 years senior secured bond
EUR 310m
June 2017
Co-Manager
5 year Term Loan B
USD 500m
October 2017
Joint Lead Manager
4 years senior secured bond
NOK 1,400m
June 2017
Joint Lead Manager
Perpetual callable note
USD 300m
TCS Holding PLC
July 2017
Sole Lead Manager
1.5 year senior secured bond
DKK 106m
November 2017
Sole Lead Manager
4 years senior secured bond
EUR 85m
November 2017
Sole Lead Manager
3 years senior secured bond
EUR 50m
November 2017
Sole Arranger
17 years senior secured USPP bond
USD 86m
November 2017
Sole Arranger
15 years senior secured bond
USD 320m
Jones act company
June 2017
Sole Bookrunner
Tap issue 4 year senior secured bond
SEK 30m
June 2017
Sole Lead Manager
4 year senior unsecured bond
SEK 148m
June 2017
Joint Lead Manager
2 years senior unsecured bond
NOK 400m
June 2017
Sole Lead Manager
6 years senior secured bond
NOK 65m
Palmyra Eiendom
December 2017
Joint Lead Manager
22 years senior secured bond
AUD 400m
September 2017
Joint manager
3 years senior unsecured bond
NOK 500m
September 2017
Joint Manager
5 years senior unsecured bond
NOK 500m
December 2017
Joint Bookrunner
3 year senior unsecured bond
SEK 400m
December 2017
Sole Arranger
3 year Term Loan
USD 85m
December 2017
Sole Bookrunner
3 years senior secured bond
SEK 140m
December 2017
Sole Lead Manager
2 year senior secured 2 year 2nd lien
EUR 31m ERU 11m
December 2017
Joint Lead Manager
5 year senior secured bond
USD 300m
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Pareto issuances 2018 YTD
January 2018
Sole Lead Manager
5 year senior secured bond
EUR 150m
January 2018
Joint Lead Manager
Tap issue
EUR 65m
February 2018
Sole Lead Manager
5 year senior secured bond
EUR 62.5m
January 2018
Sole Lead Manager
5.25 year senior secured PIK
EUR 28m
February 2018
Joint Lead Manager
Tap issue
USD 50m
February 2018
Sole Lead Manager
3 year senior secured bond
EUR 40m
February 2018
Joint Lead Manager
5 year senior secured bond
SEK 600m
February 2018
Joint Lead Manager
5.25 year junior secured bond
SEK 150m
February 2018
Sole Lead Manager
3.9 year senior secured bond
NOK 250m
March 2018
Sole Lead Manager
3 year senior unsecured bond
EUR 125m
March 2018
Sole Lead Manager
4 year senior secured bond
EUR 23m
March 2018
Joint Lead Manager
6.5 year senior unsecured bond
USD 250m
March 2018
Sole Lead Manager
Tap issue
SEK 200m
March 2018
Sole Lead Manager
3 year senior secured bond
EUR 30m
March 2018
Joint Lead Manager
5 year senior unsecured bond
NOK 400m
March 2018
Joint Lead Manager
3 year senior secured bond
EUR 27.5m
March 2018
Joint Lead Manager
4 year senior secured bond
EUR 70m
May 2018
Joint Lead Manager
5 year senior unsecured bond
NOK 450m
May 2018
Joint Lead Manager
5 year senior secured bond
USD 350m
March 2018
Joint Lead Manager
Subordinated Tier 2 bond issue
NOK 40m
March 2018
Joint Lead Manager
Hybrid Tier 1 bond issue
NOK 25m
March 2018
Joint Lead Manager
Subordinated Tier 2 bond issue
NOK 370m
March 2018
Joint Lead Manager
Hybrid Tier 1 bond issue
NOK 250m
March 2018
Joint Lead Manager
Buy-back of Tier 1 bond SVEG58 and
Tier 2 bond SVEG74
NOK 240m + 367m
May 2018
Sole Lead Manager
5 year senior unsecured bond
USD 400m
May 2018
Joint Lead Manager
4 year senior unsecured bond
EUR 100m
Updated as per 22-05-18 (from
DCM Master Pitch)
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Pareto Securities in Denmark A growing branch
Investor sales
Sales force covering primarily Danish investors
The main clientele of our
sales force consists of: Institutional investors Family offices Funds Private equity
Started in 2015, real asset syndication by our project finance team is the most recent addition to our product offering
Acquires real estate and finance it with debt and equity Approx. DKK 1.6bn under
management in Denmark Approx. DKK 35bn under
management of the Pareto group
Subsequently, Pareto
Business Management manages the property
Real asset syndication Business focus History
We specialise as an arranger of corporate bonds and private placements with Danish issuers
In 2017, we helped Goodvalley (previous Axzon) and Idavang raise more than EURm 200 in the bond market
However, we also conduct:
Debt advisory M&A activities
The Copenhagen branch was established in 2012
Since then, the office have
been expanding
Today, the branch occupies 16 professionals within Corporate finance Project finance Business management Sales
Copenhagen branch
Anno 2012
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Agenda
1. Introduction to Pareto Securities
2. Evolution of the Nordic bond market
3. When and why is the bond market relevant?
4. The investors
5. Process and costs
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Background of the Nordic Corporate Bond market
Until 4-5 years ago, bonds markets were exclusively for the largest Danish corporations
Typically the Eurobond market
International investors, comprehensive documentation, large amounts, low margins
Nordic Corporate Bond market evolved in Norway in 2003/2004
Lacked funding to finance large assets within oil- & offshore and shipping
But also within the seafood industry
Gradually expanded into other industries – in particular when the Swedish market kicked off around 2010
Selected investment-grade bond issues
Issue amount: EUR 1,000m Coupon: 1.75% (fixed) Issue Date: March 18, 2016 Maturity Date: March 18, 2021
Issue amount: EUR 1,000m Coupon: 2.5% (fixed) Issue Date: May 28, 2014 Maturity Date: May 28, 2024
Issue amount: SEK 800m Coupon: 2.625% (fixed) Issue Date: May 28, 2014 Maturity Date: May 28, 2019
Issue amount: EUR 800m Coupon: 1.75% (fixed) Issue Date: February 27, 2015 Maturity Date: February 27, 2027
Untill 4-5 years ago bonds markets were exclusively for the largest Danish corporates
International investors, Euro bond documentation, large amounts, low margins
Den norske historie og den nordiske – nordiske volumer– slide fra NT præsentation
Udvikling HY DK – slides NT præsentation
Features of the Nordic Corporate bond market
Typically margin of 4% or more – hence also called Nordic High Yield
If rated, issuers would be below BBB- ; Non-investment grade
No rating required
Much smaller amounts and limited documentation
De facto common documentation in all the Nordic countries
Limited information requirements
Investors communicates through a nominated trustee
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The Nordic High-Yield bond market Transaction volume 2013 to 2017
Note: Issues that Pareto is aware of
71.610
75.306
33.699 33.609
71.160
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
2013 2014 2015 2016 2017
DKKm Norge Sverige Finland Danmark Total
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The Danish High-Yield bond market Transaction volume 2013 to 2017
Note: Issues that Pareto is aware of
3.200
4.669
2.122
1.300
10.609
5
12
8
2
14
0
2.000
4.000
6.000
8.000
10.000
12.000
2013 2014 2015 2016 2017
DKKm
Transaction volume Private Equity issues Total # of issues
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0%
3%
8%
15%
4%
0%
0%
26%
43%
0%
1%
4%
12%
10%
11%
12%
19%
31%
0% 10% 20% 30% 40% 50%
Health Care
Real estate
Materials
Consumer staples
Utilities
Shipping
IT/telecommunication
ConsumerDiscretionaries
Industrial
% of total transaction volume 2013-2017 2017
Transaction volume on sectors
Note: Issues that Pareto is aware of
The Danish High-Yield bond market
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Issues in 2017 and 2018YTD
DKK 275m EUR 210m EUR 115m EUR 340m
EUR 70m EUR 60m DKK 106m
DKK 85m EUR 135m DKK 95m DKK 750m
EUR 100m
EUR 130m
The Danish High-Yield bond market
Note: Issues that Pareto is aware of
EUR 85m EUR 37m EUR 47m
Cipp Technology Solutions A/S
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Agenda
1. Introduction to Pareto Securities
2. Evolution of the Nordic bond market
3. When and why is the bond market relevant?
4. The investors
5. Process and costs
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Why are companies using the corporate bond market
The merits of the bond market
Take advantage of the different risk appetites between banks and the
bond market
Finance acquisitions Simplify capital structure
Enjoy fewer- and incurrence based covenants
Buy out shareholdings Avoid dilution of equity
stakes
Finance organic growth Longer tenors
Pay extraordinary dividend or refinance shareholder
loans Emerging market funding Enable higher leverage
Diversification of funding sources
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Factors shaping the increasing number of bond issues What influences the number of bond issues
Fond inflow – fixed income
Bank regulations Private Equity
funds Low interest
rates More investors Flexibility
A number of companies appreciate the market flexibility and focus less on price
Possible to tailor the financing to the needs of the company
Nordic investors seem to be indifferent with regard to currency and jurisdictions
More international investors are considering the Nordic market due to diversification opportunities and interesting returns
More non-Nordic companies tapping the market lead to an increased interest
The High-Yield market provides an interesting return
Higher gearing possible in relation to bank financing
Flexibility is appreciated
Due to regulations banks are becoming more restricted in their lending activities
Generally, more funds in fixed income products
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Agenda
1. Introduction to Pareto Securities
2. Evolution of the Nordic bond market
3. When and why is the bond market relevant
4. The investors
5. Process and costs
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Why is the agricultural sector of relevance to investors?
Source: OECD-FAO
Institutional investors and private equity funds have become more interested in the industry
That is why the sector also is of interest to Pareto!
497
20
16
487
20
15
482
20
14
472
20
13
464
20
12
453
20
11
446
20
10
437
20
09
428
20
08
521
20
20
517
20
19
510 2
01
8
503
20
17
547
20
26
20
25
543
20
24
538
20
23
532
20
22
527
20
21
420
20
07
410
Global protein consumption (million tonnes)
Global megatrend in increasing protein demand
Potential for consolidation and improved margins within the industry Investors like the business model
The exposure to agriculture provides diversification to investors
Integrating the supply chain can
reduce costs
Consolidating horisontaly will
reduce competition
Enabling economies of scale and scope will reduce costs
Difficult to get exposure to the sector in the bond market
Seafood has traditionally been used as a proxy
Infrastructure
10%
15% Retail
Real Estate
20% Commodity
? Pharma
15%
VC
PE
10%
10%
13%
Agro.
10%
Seafood
Low land and labour prices
Undersupplied markets
Growing demand due to expected higher income
Proximity to raw materials such as feed
World class Danish expertise and management skills transferred to low/lower cost jurisdictions
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Who are the investors Pareto targets professional investors
Source: SIFMA
Previously
Today
This makes the fund raising environment more favourable
Who are the investors?
Predominately institutional investors
Danish local documentation
Predominately Danish investors
Predominately DKK-denominated issues
All types of investors
Nordic investors are indifferent to currency Accept pan-Nordic documentation
European investors are looking to diversify Pick-up from Eurobond market
Non-traditional investors from North-America and Asia are present
Institutional investors; e.g. pension funds and insurance companies
Family offices
High-net-worth individuals
Asset managers
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Key investor considerations What matters to investors
Production metrics compared to peers E.g. pig production: weaned pigs per sow; feed conversion rate; daily live gain
Proven track record – performance even in difficult years Focus on cash flow conversion
The degree of political stability is carefully considered Existence or potential implementation of currency control is also considered
Horisontally: Multiple production sites, preferably in different countries Vertically: Integration of value enhancing activities throughout the supply chain
Elaborate description of biosecurity measures Animal welfare, environment and climate, labour safety, food safety and quality etc
Geopolitical risk
Diversification in operations
Operational efficiency
Solid growth
Investors have traditionally shown high demand for these investment characteristics
Biosecurity and sustainability
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Case study: Axzon A/S (now Goodvalley A/S) EUR 135,000,000 Senior Secured Bonds - 2017/2021
Axzon (the “Company”) is a vertically integrated food producer with operations within pig farming, processing of pig meat, production of pig feed on arable land, and electricity production from biogas
The Company has a position as the second largest pig producer in both Poland and Ukraine, top 10 pig meat processor in Poland, and the #1 Polish on-farm biogas operator, selling directly both to retailers and processors
Bond proceeds will be used to refinance and simplify the existing financing structure, in addition to a small dividend and an investment in the Russian subsidiary Dan Invest LLC
The bond has a bullet structure with no maintenance covenants, only an incurrence test of 2.75x for new debt and dividends
More than 45 investors participated the bond issue
Comments Transaction summary
Breakdown of non-Nordic investor demand by geography Investor demand by geography
Issuer: Axzon A/S
Amount: EUR 135m
Coupon: 3m EURIBOR + 4.5%, EURIBOR floor at 0%
Settlement: 29 May 2017
Tenor: 4 years
NIBD/EBITDA: 4.3x (2016A), 2.7x (2017B)
Incurrence test: Incurrence test at NIBD/EBITDA < 2.75x
Status: Senior Secured
Trustee: Nordic Trustee
Docs: Danish Law
Pareto Securities’ role: Sole Bookrunner
20 % 13 %
10 %
35 %
22 %
Norway
Sweden
Denmark
Finland
Non-Nordic 72 %
17 %
11 %
Continental Europe
UK
US
Strong participation from Nordic institutions coupled
with significant international demand,
covering more than 20% of the issue volume
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Case study: Idavang A/S EUR 85,000,000 Senior Secured Bonds - 2017/2021
Idavang (the “Company”) is a Danish pig producer with operations in Lithuania and Russia. The Company was established in 1999 and is 80% owned by the founders and 20% by International Finance Corporation (IFC – the World Bank)
Idavang is by far the largest pig producer in Lithuania and holds a number two position in the large North-West region in Russia
The company benefits from a combination of scale and industry-leading expertise, which enables the company to generate solid production metrics compared to the average industry
Bond proceeds will be used to refinance existing debt, intercompany loans, deposit a reserve to buy back IFC shares and pay out an extraordinary dividend
The bond has a bullet structure with no distributions allowed and no maintenance covenants, only an incurrence test of 3.00x for new debt
The transaction saw demand from not only Nordic institutional accounts but also Central and Eastern European investors. More than 35 investors participated in the bond issue
Comments Transaction summary
Investor demand by geography
Issuer: Idavang A/S
Amount: EUR 85m
Status: Senior Secured
Coupon: 3m EURIBOR + 6.5%, EURIBOR floor at 0%
Settlement: 11 December 2017
Tenor: 4 years
NIBD/EBITDA: 2.4x (2017’Q3 LTM), 3.3x (2017’Q3 LTM excl. IFC Account)
Incurrence test: Incurrence test at NIBD/EBITDA < 3.00x
Distributions No distributions allowed
Trustee: Nordic Trustee
Docs: Danish Law
Pareto Securities’ role: Sole Bookrunner
Breakdown of non-Nordic investor demand by geography
17%
30%
6% 14%
33%
Sweden
Non-nordic
Finland
Denmark
Norway
61%
39%
Eastern Europe
Other Europe
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Agenda
1. Introduction to Pareto Securities
2. Evolution of the Nordic bond market
3. When and why is the bond market relevant
4. The investors
5. Process and costs
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25
Indicative bond issue timeline Process varies with complexity of transaction and available information
Preparation phase (non-public): 4 – 6 weeks Live phase (public): 1 – 2 weeks Closing phase: 2 weeks
Pre-sounding
Agree on mandate and legal counsel
2-3 days of bookbuilding Transaction
completed
3-5 days of pre-sounding
Kick-off meeting
Broad launch
Settlement
The most time-consuming part of the process is the preparation phase
‣ Generally, 2 weeks will suffice for Pareto to prepare a Management Presentation in cooperation with the issuer, and a Credit Research Report
‣ Term Sheet to be drafted in close dialogue with management and owner representatives (if applicable) to ensure terms are aligned with business needs
Upon completion of the preparation phase, the transaction will be sounded with a selected group of investors
‣ Generally 3-5 days will suffice, during which management and Pareto will meet with investors in all Nordic capitals and potentially in London
‣ Aim is to anchor terms with key investors who are likely to provide valuable feedback to ensure successful execution
Once sufficient deal certainty has been achieved, the transaction is launched broadly
‣ Roadshow itinerary depends on investor demand
‣ 2-3 days of investor meetings, group presentations and conference calls should suffice
After close of books, approximately 5 business days can be expected for settlement. However, this can potentially be flexible depending on preferences
Limited legal DD Drafting of credit analysis
Drafting of term sheet Preparation of marketing materials
Handling of processes with Pa and Trustee
Books close
Closing call
Updated (22-05-18) from DCM Master Pitch
presentation
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Pareto will prepare deal documentation & marketing materials Relatively light documentation is standard in the Nordic bond market
Investor presentation Prepared by Pareto Securities with assistance from the issuer
Information memorandum (if applicable)
In some cases, an Information Memorandum is prepared
This document will include more detailed information about the issuer, relevant contracts, etc.
Prepared by Pareto Securities with the assistance from the issuer
Term sheet
A condensed version of the bond terms
Prepared by all parties
Pareto Securities to provide initial drafts
Bond terms To be entered into between the Issuer and the Trustee
Normally based on Nordic Law
Credit analysis Credit analysis prepared by Pareto’s credit research team
No official rating required (i.e. Moody’s and S&P)
Updated (22-05-18) from DCM Master Pitch presentation – Deleted “Listing process” as it
was very much “Norwegian”-like
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Size of issue, costs and alternatives
The ideal issue size is from DKK 200m and upwards
That being said, in 2017, the smallest Pareto transaction was DKK 96m
Furthermore, 2nd lien issues, subordinated issues or tap issues may be smaller
The ideal issue size ranges from DKK 100m to DKK 200m
One or two investors acquire the entire amount issued
Bespoken loan documentation
Tenors range from 1 to 7 years
Fixed as well as floating rates are possible
Execution risk
Arrangement fee: From 1.5% to 3% of issue size
Depends on size, type of capital and complexity
Legal fee: For a senior unsecured bond listed in one jurisdiction, the cost is
normally around DKK 500,000 to DKK 700,000
Complexity in terms of security package may add to the costs
NASDAQ OMX: Fee associated with Finanstilsynet amounts to approx. DKK 50,000
Listing at NASDAQ OMX amounts to DKK 20,000
Annual fee amounting to app. 22,000 for the life of the bond
Værdipapircentralen (VP Securities): Year 1: App. DKK 17,200. Subsequent years: App. DKK 11,800
Trustee: Acts as the representative of the bondholder Costs approximated to DKK 40,000-50,000, annually
Broad based bond issue Private placements
Size
of
issu
e
Co
sts
asso
ciat
ed
wit
h is
sue
Arrangement fee: From 3% to 5% of issue size
Depends on size, type of capital and complexity
Legal fees: Normally around DKK 300,000 to DKK 500,000
Complexity in terms of security package may add to the costs
Since a private placement is not listed, there are no costs associated with NASDAQ or VP Securities
Subordinated debt
Private & confidential
28
Contact details and disclaimer
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Disclaimer
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