Swedish fast-fashion retailer Hennes & Mauritz AB (H&M) raised €500mn ($604mn) on Thursday via its debut bond. The company managed to slash the final pricing on the bond by half since initial price guidance after it received strong investor demand for the sustainability-linked bond (SLB). The 8.5Y bond launched at an initial guidance of 90-100bp over Mid-Swaps. As orders started pouring in, the guidance was revised to MS+60bp before finally pricing at 0.397% or MS+50bp, a massive 50bp tightening vs. an average of 32bp for bonds issued this year as per Bloomberg. The bonds, expected to be rated BBB received final orders of €3.8bn ($4.6bn), 7.6x issue size. One of the bankers on the deal, Lars Mac Key, head of sustainable bonds at Danske Bank said, “This blowout deal truly opens the door for issuers to come to the market and meet the sustainability-focused investor community.” The SLB carries a coupon-step up provision that is linked to recycled material and emission targets, as stated in the bond supplement on the Irish Exchange. The bonds carry a make whole call at 15bp over the benchmark and a clean-up call (80%).
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