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SNCF raises a record €2 billion loan with a 30-year maturity


Written by Frédéric Dubessy on Wednesday, October 28th 2020 à 12:20 | Read 349 times



The SNCF has already raised €6.3 billion in 2020 (photo: B.L.)
The SNCF has already raised €6.3 billion in 2020 (photo: B.L.)
FRANCE. On Tuesday 27 October 2020, the SNCF closed a €2 billion 30-year bond issue launched on 22 October 2020, "the largest transaction ever carried out by the group on the financial markets," a press release said. According to the same text, "the transaction generated strong demand from international investors with an order book of €4.5 billion and more than 140 investors having subscribed to it". The lead managers were Bank of America Securities, BNP Paribas, Crédit Agricole, CIB, HSBC and ING.

SNCF is rated Aa3, AA- and A+ respectively by Moody's, S&P and Fitch.

The bonds have a maturity date of 28 February 2051 with a coupon of 0.875% and a fixed yield of 0.976%. Asset managers represent the majority of subscribers (48%) followed by insurers and pension funds (36%), private banks (12%) and central banks (3%). This offer was 30% attractive in Southern European countries (excluding France), i.e. as much as in Germany and Austria combined. France accounts for 24% of the total amount.

Southern Europe, together with France, accounted for 54% of subscriptions to the new loan (iconography: SNCF).
Southern Europe, together with France, accounted for 54% of subscriptions to the new loan (iconography: SNCF).
In 2018, the SNCF (€35.1 billion turnover in 2019 and 275,000 employees) was facing a debt of €55 billion, and the French State had announced that it would take over €35 billion of this amount in 2022. The Covid-19 crisis has increased this financial hole by €3 billion in six months.

Since the beginning of the year, the French railway group has raised €6.3 billion on the bond markets. It validated its strategic plan on 8 October 2020, in line with the French government's €100 billion "France relance" plan. The latter will enable the SNCF to receive €4.5 billion of the €11 billion envelope earmarked for transport in the plan unveiled in September 2020. This sum will be used to develop rail freight, short lines and night trains.
 



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