Eir sells €500m bond to cut interest rates

Raising €150m more than initially planned to avail of slashed rates...

Eir sells €500m bond to cut interest rates

Eir, Facebook

Eir has taken advantage of market conditions today to issue €500 million in fresh bonds today.

The Irish telecommunications company had announced that it would aim to raise €350m in bond refinancing on Tuesday.

The move saw eir redeem bonds with an interest rate of 9.25% that were set to mature in 2020.

In their stead, the company issued €500m worth of six-year secured bonds which carry a coupon of 4.5%, less than half the previous rate.

The refinancing lowers the companies costs, with the new bonds lower interest rates as well as longer maturity times.

Investment agency Moody's recently upgraded its credit rating, with Fitch giving today's issuance a B+ rating, just below the standard investment grade.

It comes as the European Central Bank begins its programme of purchasing corporate bonds in a bid to stimulate the Eurozone.

Eir CEO Richard Moat said:

"The solid execution of our strategy over the last three years has delivered a strong turnaround in the performance of our business.

"The successful outcome of this transaction reflects market acknowledgement of our progress, and the significant appetite which exists to invest in our company."

Eir CFO Huib Costermans commented:

"These transactions reflect the improvement of our financial performance and the positive future outlook for the business.

"The bond refinancing aligns the maturity date of all of our securities in 2022, and will generate close to €17 million in annual interest savings.

"Together with the RCF that we are putting in place, we have secured much greater flexibility in our capital structure."

Meanwhile, eir is vying to secure a number of the upcoming National Broadband Plan contracts, though they are likely to be delayed until 2017.