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REGION: INTERNATIONAL

Aug 9, 2018 | Weingarten

Another bonded loan successfully placed

• Transaction volume in line with excellent business performance
• Funding terms even better than in previous years
• CHG-MERIDIAN opts for parallel marketing via a digital platform for first time

CHG-MERIDIAN has placed a bonded loan for €75 million, opting for parallel marketing for the first time. Based in southern Germany, the non-captive specialist in technology management and finance primarily drew on the experience of Helaba Landesbank Hessen-Thüringen, which is one of the leading arrangers of bonded loans. In parallel, however, CHG-MERIDIAN tried out the innovative features of the latest financial technology by using the new VC Trade electronic platform.

Electronic platforms digitalize the entire process for a bonded loan transaction, from the issuer to the arranging banks to the investors. This makes issuances more transparent and faster. “Innovation is essential to our business success, which is why we test and adapt groundbreaking solutions at an early stage, including those related to funding. As CHG-MERIDIAN is a regular issuer with an excellent reputation, we may even place bonded loans exclusively via digital marketplaces in the coming years,” says Volkmar Lange, Head of Group Treasury at CHG-MERIDIAN.

Excellent terms for the sixth time in succession

The successful placement marks the sixth time in a row that CHG-MERIDIAN has secured a package of medium-term funding on excellent terms. The bonded loan is split into a €50 million tranche with a four-year fixed term and a €25 million tranche with a five-year fixed term. “This volume reflects the consistent strength of our business performance. In 2017, we generated a record volume of lease originations of €1.244 billion. At the half-year point, we have surpassed the very good figures for the same period of 2017,” explains Lange. The issue proceeds will be used for further growth and to fund existing projects.

Oversubscribed despite low interest rates

This year, CHG-MERIDIAN’s total funding volume will again be above the €1 billion threshold. Corporate lending accounts for more than €200 million of that total. As well as bonded loans, there are syndicated loans arranged through regional state banks as well as bilateral loan tranches with a volume of over €10 million each.

At around 6 percent, bonded loans make up a relatively small proportion of the total volume but they offer strategic added value as they are widely marketed among banks, savings banks, and investors. This enables CHG-MERIDIAN to cement its position in the market. Some 70 investors in total have participated in bonded loans issued by CHG-MERIDIAN over the past six years. In the latest transaction, the Company’s good reputation again helped to ensure that demand was higher than the target volume. CHG-MERIDIAN can further optimize its funding costs thanks to the attractive terms, which are even lower than in previous years.

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CHG-MERIDIAN: The Company

CHG-MERIDIAN is one of the world's leading non-captive providers of technology management services to the IT, industrial, and healthcare sectors. With some 900 employees, CHG-MERIDIAN offers its customers comprehensive support for their technology infrastructure – from consulting, financial, and operational services to used-equipment remarketing services through its two technology and service centers in Germany and Norway. CHG-MERIDIAN provides efficient technology management to large, medium-sized, and small companies as well as government agencies. It now serves more than 10,000 customers worldwide, managing technology investments worth a total of over €4.6 billion. The online-based TESMA® Technology and Service Management System provides more than 15,000 users with maximum transparency in technology management. The Company has offices in 35 locations in 22 countries across the globe; its headquarters are in the southern German town of Weingarten.