Pirelli concludes €600 million bond launch

Pirelli has concluded the placement of an unrated bond issue with international institutional investors on the Euromercato for a total nominal value of €600 million. The operation obtained the lowest coupon – 1.75 per cent – in Pirelli’s history, as well as for an Italian unrated corporate Eurobond. Pirelli comments that this demonstrates the confidence investors have in its credit. The loan was placed with over 400 international investors and attracted total orders of approximately €5 billion.

The placement is part of a series of actions aimed at optimising the company’s debt structure by lengthening the average debt maturity – which goes from 1.6 years to 2.3 years – and diversifying the source of funding, and also contributes to a lowering the average cost of company debt. The operation is part of the group’s Euro Medium Term Note Programme.

The bond issue has the following features:

issuer: Pirelli International plc
guarantor: Pirelli Tyre S.p.A.
amount: €600 million
settlement date: 18 November 2014
maturity date: 18 November 2019
coupon: 1.75 per cent
issue price: 99.498
redemption price: 100 per cent

The effective yield at maturity will be 1.856 per cent or 145 basis points higher than the reference rate (mid-swap). The bond will be listed on the Luxembourg stock exchange.