The 5-yr unsecured bond pays 1.5% annual interest rate, Ferrari said in its news release.
Ferrari has been less affected by the C-19 coronavirus chaos than the other automakers. Its deliveries actually rose by 4.9% in Q-1 of Y 2020; net revenues declined 0.8% on lower engine sales to Maserati and lower sponsorship income due to the suspension of F1 races.
Adjusted earnings before interest and tax were down 5.2% to 220-M euros and cash flow more than halved to 73-M euros.
Ferrari said there were some order cancellations during the Quarter and warned that the impact of disease would be felt in its Q-2 results.
Ferrari cut its revenue and profit forecast for Y 2020, but said it assumes a “V-shaped” recovery with 2-H of the year generating an increase in revenues of some 10% and a growth in gross operating profit of 15% compared with 2-H of Y 2019.
The company had a total available liquidity of 1.23-B euros at the end of March. On 5 May Ferrari paid out a total amount of 210-M euros as a dividend on Y 2019 results, later beefed up its liquidity to 1.37-B euros by doubling available undrawn committed credit lines.
The bond issue will improve Ferrari’s liquidity to approximately 2-B euros.
Ferrari CFO Antonio Picca Piccon said the liquidity cushion “was a Key factor in the decision to dispense our dividend last month. This is also very tangible evidence of our confidence in the future.”
The pricing of the notes due in May 2025, being the initial offering for a minimum benchmark size more than 5X oversubscribed. The issue price of the Notes is equal to 98.898% of their principal amount and the Notes have a fixed annual coupon of 1.500%.
Banca IMI S.p.A., Barclays Bank PLC, BNP Paribas, Goldman Sachs International, J.P. Morgan Securities plc, Merrill Lynch International and UniCredit Bank AG acted as Joint Lead Managers and Bookrunners to the issue of the Notes.
Application has been made for the Notes to be admitted to the Official List of Euronext Dublin and to trading on the regulated market of Euronext Dublin. Settlement and issue of the Notes are expected to occur on 27 May 2020.
Our overall technical outlook is Very Bullish in here.
Ferrari finished Tuesday at 162.78, +2.30 in NY.
The Maranello Outfit’s shares were raised to Buy from Hold at HSBC.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I have called it at it at 200+/share long term, adjusting it to 200/share short term (after the virus) and siding with BAML to 230 long term for now. The stock is now considered defensive in the sector.
Have a healthy day, Keep the Faith!