Otto Group raises 300 million euros with hybrid bond

13.07.2018 | Hamburg

The Otto Group has successfully placed a so-called hybrid bond. The issue was marketed to large institutional investors such as asset managers, insurers and private banks in Germany and other EU countries. This finance instrument was very well received by investors, with the issue twice oversubscribed. The Otto Group has successfully raised 300 million euros with the bond and will pay a coupon of 4.0 percent over the next seven years.

The special feature of the hybrid bond is that under IFRS rules it is viewed as equity and therefore strengthens shareholders’ equity in the consolidated financial statement. To achieve this the bond was formally assigned no fixed term, but may be repaid after 7 years.

Thanks to this structure, with a 4 percent coupon the Otto Group can offer investors a higher return than with a classic bond. The 1,000-euro denomination also makes the bond suitable for experienced private investors who have been assigned to the corresponding risk category by their bank.

“We are delighted at investors’ enthusiastic response to this issue. The very successful placement shows that the Otto Group continues to enjoy an excellent reputation on the capital market”, says Petra Scharner-Wolff, Otto Group Executive Board Member Finance.

UniCredit acted as Sole Structuring Advisor for the issue, with Commerzbank, UniCredit and Warburg on board as bookrunners. Deutsche Bank acted as co-manager.


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About Otto Group

Founded in Germany in 1949, today the Otto Group is a globally operating retail and services group with around 51,800 employees. The Group includes 123 major companies and is present in over 30 countries in Europe, North and South America and Asia. Its business activities are grouped into three segments: Multichannel Retail, Financial Services and Service. In the 2017/18 financial year (to 28 February), the Otto Group generated turnover of 13.7 billion euros. It is one of the world’s largest online retailer. E-commerce, catalogue sales and over-the-counter retail form the three pillars of the Otto Group’s Multichannel Retail strategy. Its worldwide corporate activities, numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies operate largely independently, guaranteeing flexibility, customer proximity and optimum target-group appeal in their respective national markets.