Campari Raises Euro Loan to Repay Dollar Bonds and Cut Costsby
Italian drinks maker Davide Campari-Milano SpA took out a loan in euros to repay dollar-denominated bonds as plunging borrowing costs make it cheap for companies to refinance debt.
The producer of more than 50 liquor brands, including Skyy vodka and Campari aperitif, secured a 300 million-euro ($337 million) three-year term loan from Banco Popolare SC, Intesa Sanpaolo SpA and UniCredit SpA, it said in a statement. The deal will allow the Milan-based company to reduce its cost of funding.
Campari is the latest company to refinance debt as European Central Bank stimulus pushes down corporate borrowing costs. It will pay investors 75 basis points more than benchmark rates for the loan, compared with an average coupon of 5.82 percent on the $310 million of July 2018 and June 2019 notes it will repay, according to the statement. High-grade borrowers have paid an average premium of 79 basis points for loans in the single currency this year, according to data compiled by Bloomberg.
The company also arranged a 200 million-euro revolving credit facility maturing in three years to replace a 450 million-euro committed revolving credit facility.
Campari September 2020 bonds were quoted at a record high of 107.2 cents on the euro Thursday, according to data compiled by Bloomberg.