Agrimoney.com | 5 November 2012
Ekosem-Agrar stoked a run of debt issuance by corporates by unveiling plans for raising E60m through bonds to support its growth plans, including expansion of its sizeable Russian land bank.
The German-based group, the holding company of Russian farm operator Ekoniva, said it would on November 26 start subscription of the bond, which will offer a coupon of 8.5% and term of six years.
The issue will be the second by the group of, following its, oversubscribed, E50m placement in March, and will also be listed on the Bondm segment of the Stuttgart stock exchange.
It also comes amid a spate of corporate bond issuance stoked by low interest rates, and central bank action to ease monetary policy, which has boosted the appeal to investors of relatively high-yielding assets, and prompted many companies to exploit financing rates low to issuers by historical standards.
General Electric, the US industrial group, last month said it had refinanced $5bn on bonds while, in the agricultural sector, Archer Daniels Midland revealed that holders of $567.8m of debt had agreed to swap for long-dated debentures, dated 2043, with a lower yield of 4.016% and cash.
Growth plans
Ekosem said that funds raised from the debt issue would be used to "optimise the company's financing structure and to finance its future growth", primarily investment in farmland.
The group, which holds some 173,000 hectares of Russian farmland, has plans to expand it landbank to 238,000 hectares by 2015.
It also plans to increase its dairy herd, which at 13,850 cows is already the third largest in Russia, to 30,000 by 2015 to exploit growing demand for milk, of which the country is currently a large importer.
Russia's volatile grain harvest record has boosted the appeal to livestock groups such as Ekosem, whose total cattle herd numbers more than 36,000 head, of owning their own fodder production operations.
'Ideal conditions'
The Russian dairy market, in which milk prices are some 20% higher than in Germany, offers "ideal conditions to grow our business", Ekosem said.
Wolfgang Bläsi, the group's finance director, also said that the first Ekosem corporate bond had "outperformed the market throughout its term to date and is selling clearly above par, which underlines its attractiveness to investors."
Ekosem-Agrar stoked a run of debt issuance by corporates by unveiling plans for raising E60m through bonds to support its growth plans, including expansion of its sizeable Russian land bank.
The German-based group, the holding company of Russian farm operator Ekoniva, said it would on November 26 start subscription of the bond, which will offer a coupon of 8.5% and term of six years.
The issue will be the second by the group of, following its, oversubscribed, E50m placement in March, and will also be listed on the Bondm segment of the Stuttgart stock exchange.
It also comes amid a spate of corporate bond issuance stoked by low interest rates, and central bank action to ease monetary policy, which has boosted the appeal to investors of relatively high-yielding assets, and prompted many companies to exploit financing rates low to issuers by historical standards.
General Electric, the US industrial group, last month said it had refinanced $5bn on bonds while, in the agricultural sector, Archer Daniels Midland revealed that holders of $567.8m of debt had agreed to swap for long-dated debentures, dated 2043, with a lower yield of 4.016% and cash.
Growth plans
Ekosem said that funds raised from the debt issue would be used to "optimise the company's financing structure and to finance its future growth", primarily investment in farmland.
The group, which holds some 173,000 hectares of Russian farmland, has plans to expand it landbank to 238,000 hectares by 2015.
It also plans to increase its dairy herd, which at 13,850 cows is already the third largest in Russia, to 30,000 by 2015 to exploit growing demand for milk, of which the country is currently a large importer.
Russia's volatile grain harvest record has boosted the appeal to livestock groups such as Ekosem, whose total cattle herd numbers more than 36,000 head, of owning their own fodder production operations.
'Ideal conditions'
The Russian dairy market, in which milk prices are some 20% higher than in Germany, offers "ideal conditions to grow our business", Ekosem said.
Wolfgang Bläsi, the group's finance director, also said that the first Ekosem corporate bond had "outperformed the market throughout its term to date and is selling clearly above par, which underlines its attractiveness to investors."
