Swedish Match and UPM Kymmene, profiled below, typify a new breed of Nordic corporate issuer. Both were in the markets with Eurobond deals in the second half of September.
Swedish Match
In mid-September Swedish Match and its lead manager, ABN Amro, roadshowed a €250 million ($265 million) to €300 million seven-year issue in the Netherlands, France, Germany and the UK.
In its presentation to investors, the company said that it was looking to refinance existing debt to increase the liability maturity from its prevailing average of three years and to prepare itself should further acquisitions present themselves. It also mentioned the preferential treatment given to longer-term debt by the rating agencies.
Group treasurer Jan Arpi says that the deal would have been difficult to do before the single currency came into being. "With the launch of the euro, the sector has opened up to lower-rated credits. Demand for higher-yielding credits has created demand for corporate deals."
The company, which set up an €500 million Global MTN programme with the help of ABN Amro in November last year, has already issued an €60 million private placement in February, but this is its first big public transaction.
Says Sven Hendrikes, Swedish Match's chief financial officer: "Part of the reason we are coming to the Eurobond market is because of the increased interest from investors in longer-term corporate paper."
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