Otto Group raises €300m with hybrid bond

Otto Group – the retail giant and parent of the parcel delivery company Hermes – has raises €300m with a hybrid bond.

In a statement issued on Friday (13 July), Otto Group said: “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 group will pay a coupon of 4% over the next seven years.

The Otto Group explained the significant of a “hybrid bond”: “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.”