Aug 9, 2018 | Weingarten
CHG-MERIDIAN has placed a bonded loan for €75 million, opting for parallel marketing for the first time. Based in southern Germany, the non-captive specialist in technology management and finance primarily drew on the experience of Helaba Landesbank Hessen-Thüringen, which is one of the leading arrangers of bonded loans. In parallel, however, CHG-MERIDIAN tried out the innovative features of the latest financial technology by using the new VC Trade electronic platform.
Electronic platforms digitalize the entire process for a bonded loan transaction, from the issuer to the arranging banks to the investors. This makes issuances more transparent and faster. “Innovation is essential to our business success, which is why we test and adapt groundbreaking solutions at an early stage, including those related to funding. As CHG-MERIDIAN is a regular issuer with an excellent reputation, we may even place bonded loans exclusively via digital marketplaces in the coming years,” says Volkmar Lange, Head of Group Treasury at CHG-MERIDIAN.
The successful placement marks the sixth time in a row that CHG-MERIDIAN has secured a package of medium-term funding on excellent terms. The bonded loan is split into a €50 million tranche with a four-year fixed term and a €25 million tranche with a five-year fixed term. “This volume reflects the consistent strength of our business performance. In 2017, we generated a record volume of lease originations of €1.244 billion. At the half-year point, we have surpassed the very good figures for the same period of 2017,” explains Lange. The issue proceeds will be used for further growth and to fund existing projects.
This year, CHG-MERIDIAN’s total funding volume will again be above the €1 billion threshold. Corporate lending accounts for more than €200 million of that total. As well as bonded loans, there are syndicated loans arranged through regional state banks as well as bilateral loan tranches with a volume of over €10 million each.
At around 6 percent, bonded loans make up a relatively small proportion of the total volume but they offer strategic added value as they are widely marketed among banks, savings banks, and investors. This enables CHG-MERIDIAN to cement its position in the market. Some 70 investors in total have participated in bonded loans issued by CHG-MERIDIAN over the past six years. In the latest transaction, the Company’s good reputation again helped to ensure that demand was higher than the target volume. CHG-MERIDIAN can further optimize its funding costs thanks to the attractive terms, which are even lower than in previous years.