Ireland’s financial services’ sector has received a significant boost in the arm courtesy of the recent decision by Arla Foods, one of Europe’s leading dairy processors, to proceed with a bonds issue of €165 million (1.5 billion Swedish Kroner) on the Irish Stock Exchange.
“We have gone down the route of issuing bonds before, as part of our ongoing financing arrangements, but never using the Irish Stock Exchange, ” Arla’s Head of Corporate and Treasury Finance John Duus Andreson told Agriland.
“Before going ahead with the project we sought advice on how best to proceed with the bond issue. All of our key advisors came back with the same message: use Ireland.
“And they were right. We have been very impressed with the efficiency of the staff in Dublin that have been working with us. Matters of this type are very complicated, by their very nature. However, the team that we worked with in Ireland could not have been more helpful and proactive.”
He continued: “I can confirm that the bond offering was subscribed to twice over. But I should also point out that Arla remains a farmer owned co-op. Those investing in the bond offer will not be given shares in the organisation.”
According to Andreson, the bonds will supplement other sources of financing, such as member retainment, mortgage backed financing, and bank loans.
The bonds will be listed on the Irish Stock Exchange and have a maturity of five years. The bonds were sold through Handelsbanken Capital Markets and Nordea Markets and are issued under Arla’s Euro Medium Term Note (EMTN ) programme, which allows for a more active use of bonds.
The bond issue will not affect Arla’s ownership structure and status as a 100% farmer owned co-operative.