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Kering launches £1bn bond issue

Kering has launched a €1.2bn (£1bn) bond issue after the French luxury group took a 15.4% sales hit in the first quarter as a result of coronavirus. 

Kering, whose brands include Gucci, Balenciaga and Bottega Veneta, said the bond issue “contributes to the diversification of [the group’s] financing resources and to an increase in its financial flexibility, by enabling the group to refinance its existing debt and extend the maturity date of its funding sources”.

The bond will be issued in two tranches, each worth €600m (£523m). The first will mature in three years with a 0.25% coupon, and the second in eight years with a 0.75% coupon.  

The bond issue is managed by Crédit Agricole CIB, HSBC, BNP Paribas, Natixis, Société Générale, UniCredit and Mitsubishi UFG.

Kering’s total revenue in the first quarter of 2020 dropped 15.4% year on year to €3.2bn (£2.8bn).

François-Henri Pinault, chairman and chief executive, said: “The Covid-19 pandemic took a heavy toll on our operations in the first quarter. After a very promising start to the year for all our houses, the rapid spread of Covid-19 affected our performance in our main markets. We are working hard on ensuring the continuity and readiness of all our businesses.

“Adapting our cost base and preserving our cash position are top priorities, implemented at all levels of the group. Our solid financial structure and our agility serve us well in this difficult period. My confidence in Kering’s future lies in the strength and values of our houses, which will all emerge from this period of uncertainty at the top of their game, as well as in our ability to blend long-term vision with near-term imperatives.”

 

 

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