FC Gelsenkirchen-Schalke 04 e.V. has successfully completed the early refinancing of its 6.75% 2012/2019 bond by issuing two new bonds. As with the first issue in 2012, IR.on AG served as the club’s communications consultant.
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Cologne, 1 July 2016 – FC Schalke 04 made a swap offer with a bonus to the existing bondholders. The new bonds were offered with a term of either five or seven years and a coupon of 4.25% p.a. or 5.00% p.a., respectively. The objective of the early refinancing was to further optimise the club’s financing costs and the maturity structure of its debt. About a week before the end of the planned subscription period, demand for the new bonds already totalled more than EUR 100 million. This was more than twice the targeted issue volume of EUR 50 million. At just under 60%, the swap offer achieved a far higher acceptance ratio than is customary in this market. During the 3-day subscription period, orders worth about EUR 20 million were placed via the website of FC Schalke 04.
The complexity of the issue posed a major communication challenge. Existing bondholders received a swap offer and an additional purchase option for the Schalke bonds with different terms and conditions. New investors could either place purchase orders via FC Schalke 04’s website or subscribe via the private placement route for institutional investors. Moreover, there was a subscription option via the Frankfurt Stock Exchange, which was cancelled due to the early oversubscription of the bonds.
Including the Schalke issue, IR.on has been instrumental in a total of 23 bond transactions with total proceeds exceeding EUR 1.5 billion in the last five years.
Given the difficult market environment for mid-cap bonds in Germany, the challenge on the media relations side was to highlight FC Schalke 04’s solid track record in the capital market over the past four years. The club’s positive financial performance since the issue of its 6.75% bond in 2012 is not least reflected in the strong price performance of its bond.
At the end of the day, institutional investors as well as private investors and supporters of the club were convinced of the merits of this bond issue and the club’s reputation in the capital market has been further enhanced.
Including the Schalke issue, IR.on has been instrumental in a total of 23 bond transactions with total proceeds exceeding EUR 1.5 billion in the last five years.
