Redcare Secures EUR300 Million Through Convertible Bonds

Redcare has successfully issued EUR300 million in non-subordinated, unsecured convertible bonds, according to the company's announcement. The bonds are set to mature in 2032 and will carry an annual interest rate of 1.75%.

The convertible bonds, issued in denominations of EUR100,000, will be repaid on or around April 16, 2032, unless they are converted, repaid, or repurchased prior to that date. Within two weeks following the settlement date, Redcare plans to list these bonds for trading on the open market of the Frankfurt Stock Exchange. The initial conversion price is set at EUR173.74, reflecting a conversion premium of 42.5% above the reference price of EUR121.92.

In conjunction with this issuance, Redcare is also repurchasing convertible bonds worth EUR157.9 million that are due in 2028 from existing bondholders. This repurchase accounts for approximately 70.2% of the outstanding nominal amount of EUR225 million. The buyback price for each outstanding bond, with a nominal value of EUR100,000, will be EUR99,200. The net proceeds from the bond issuance are intended for repaying the outstanding convertible bonds and for general corporate purposes.

Convertible bonds serve as a financial tool allowing companies to raise capital for specific objectives. In this case, Redcare has indicated that the funds will be allocated for the repurchase of existing convertible bonds and general corporate needs. These financial instruments are typically issued by corporations, allowing for a potential conversion of debt into equity. This conversion must be approved by the company's general meeting. Generally, convertible bonds offer lower interest rates than traditional bonds due to their conversion feature.

Redcare's initiative follows a similar approach taken by Doc Morris, which raised CHF 200 million through convertible bonds approximately a year ago.