Porsche Automobil Holding SE, the investment firm owned by the Porsche-Piech family, got bumper orders for its debut bond as credit investors continue to flock to blue-chip names — especially those outside the financial sector.
(Bloomberg) — Porsche Automobil Holding SE, the investment firm owned by the Porsche-Piech family, got bumper orders for its debut bond as credit investors continue to flock to blue-chip names — especially those outside the financial sector.
The majority owner of Volkswagen AG got more than €5.35 billion ($5.9 billion) in orders for a €750 million bond on Thursday, the company confirmed. The demand allowed the company to tighten pricing by 45 basis points from initial discussions of about 185 basis points over mid swaps.
That high interest reflects the appeal of big names as credit markets recover from turmoil in the banking sector. A debt sale by luxury giant LVMH this week also saw demand of almost three times the bond’s size.
Porsche Automobil Holding is “a new and uniquely attractive name in the debt market, coupled with strong financials and the company’s clear focus on mobility and industrial technology,” said Christoph Paul, head of debt capital markets for Germany, Austria and Switzerland at Mizuho Securities Europe, which was one of the bookrunners on the deal.
It’s the first foray into the bond market for the investment company, which was created in its current form in 2007, and comes as Europe’s auto sector is seeing a recovery from a supply-chain crunch. Auto sales in the region in March jumped the most in almost two years as the supply of key components including semiconductors continues to improve.
Today’s deal comes just two months after the Stuttgart-based firm smashed records in Germany’s Schuldschein market. The sale of €2.7 billion of the niche German debt pulled in about 120 investors including European, Asian and American banks, as well as pension funds and insurers.
Porsche Stuns Private Debt Market With Record €2.7 Billion Sale
Proceeds from the bond will be used for general corporate purposes and to help repay a bridge loan taken out last year to buy shares of sports-car maker Porsche AG, according to Christoph Kulik, director of finance at the company. There’s roughly €1 billion of the bridge loan left, said Kulik, adding that dividends from Volkswagen and Porsche AG will also go to the debt repayment.
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