Symrise nears second step of refinancing with bond

* Eyes seven-year euro bond in debut issue

* Bond joins growing list of unrated deals

* Comes after private placement with U.S. Prudential unit

By Natalie Harrison

LONDON, Oct 14 (BestGrowthStock) – German scents maker Symrise
(SY1G.DE: ) said on Thursday it expected to complete the next
phase of its refinancing plan with a seven-year euro bond that
will most likely come to the market on Monday.

The bond will be less than benchmark size 500 million euros
($703 million) and is part of a plan to refinance 550 million
euros of debt maturing at the end of next year.

It will follow meetings with European investors that ended
on Wednesday and a separate $175 million private placement with
Prudential’s U.S. unit, Prudential Investment Management
(PRU.N: ), this week at a spread of 170 basis points over 10-year

The placing of the fixed-term loan, which carries a coupon
of 4 percent, was unusual because it was arranged between the
two companies without a banking intermediary, effectively
cutting out the middle man and his fees.

“It was arranged between us. In preparation for the
refinancing we were looking at different instruments to improve
our maturity profile,” a spokesman at Symrise said.

The lead managers on the bond deal — Commerzbank (CBKG.DE: ),
Deutsche Bank (DBKGn.DE: ) and UniCredit (CRDI.MI: ) — are now
negotiating price guidance with investors.

“It is an inaugural issue and unrated, so the accounts have
to do some credit work, but the issue should come within the
next 48 hours,” a syndicate banker involved said.


Unrated corporate deals have been a growing feature in the
European bond market for more than a year, a reaction by smaller
companies — typically with weaker credit profiles — to banks
tightening loan funding. [ID:nL5579693]

The trend has continued in 2010, reaching its apex when
German software company SAP (SAPG.DE: ) raised 1.1 billion euros
in July. [ID:nLDE66S1RZ]

British retailer John Lewis, also unrated, raised 300
million pounds ($481 million) via a 15-year issue at 220 basis
points over gilts, also in July. [ID:nLDE66E1LB]

“We did not see the need for a rating. We are not going to
be a frequent borrower. We have a stable business model and
excellent cash flow so this deal should fly without one,” the
Symrise spokesman said.

“We see ourselves as investment grade, somewhere around
triple-B or triple-B plus,” the spokesman added.

The third component of the company’s refinancing plan will
be a revolving rolling credit facility (RCF), which will
probably have a 4-5 year maturity, the spokesman said.

($1 = 0.7110 euro = 0.6241 pound)

(Editing by David Hulmes

Symrise nears second step of refinancing with bond