Deutsche Post to raise EUR 1bn through bonds issue

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Deutsche Post DHL is looking to take advantage of low interest rates in the financial markets at the moment by raising EUR 1bn through the issue of corporate bonds.

The German mail and logistics giant said it was taking advantage of a favourable capital market environment for companies with strong credit ratings.

It will issue two bonds with terms of between five and ten years, it said yesterday.

The capital raised will be used to refinance Deutsche Post’s existing 10-year bond, which is due to mature in January.

Deutsche Post has also renewed a five-year EUR 2bn syndicated loan that was agreed back in 2010 with a group of national and international banks including Commerzbank, HSBC, City and Deutsche Bank. The loan was renewed ahead of schedule, up to 2018, and on “more favorable terms”, the company said. There are also two options for additional one-year extensions.

The renewed loan means the company has “locked in” a long-term secure and “financially attractive” liquidity reserve, the company said.

“Our very solid financial foundation gives us a high degree of flexibility and stability, allowing us to actively shape the Group’s future at any time,” said Deutsche Post DHL CFO Larry Rosen. “The step we are taking today further strengthens our sound financial position.”

Deutsche Post DHL has a Baa1 credit rating from the ratings agency Moody’s, as confirmed in August, while the Fitch Ratings agency has the company at a BBB+ rating.