Deutsche Post plans €1bn bond issue
Deutsche Post, the German postal and logistics group, plans to raise about €1bn ($920m) through a bond issue, FT Deutschland has learned.
The move, the first ever by the former state monopolist, is aimed at transforming short-term liabilities into longer-term ones. Talks with various investment banks were in an advanced state, but a consortium manager had not yet been appointed. The issue was expected within the next few weeks. Deutsche Post declined to comment over the weekend.
Deutsche Post received its first credit ratings at the beginning of May. Standard & Poor’s gave the company an A+ rating, Fitch gave it AA- and Moody’s Aa3.
Backing the strong ratings is the company’s domestic household mail business – still operating almost without competition and generating a healthy cash flow.
Last year, the mail division accounted for three-quarters of Deutsche Post’s €2.55bn profit. The group has also recently been successful in reducing its net debt from €2bn to €1.75bn, one of the lowest among Germany’s blue-chip companies.
Klaus Zumwinkel, chief executive, and Edgar Ernst, finance director, will be hoping to benefit from the confidence crisis in telecommunications bonds, exemplified by the chaotic pricing process of Deutsche Telekom’s €5bn bond last week.
The company is expected to market itself as a solid logistics provider that has not engaged in costly high-tech adventures.
