Bonds
Ocado’s Bond Sale Comes at Hefty Cost
- Grocery provider will pay 10.5% coupon on five-year notes
- Higher coupons will add to loss-making company’s interest bill
Proceeds from the latest sale will go toward refinancing £600 million of the convertible bond due next year.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Ocado Group Plc went a long way toward addressing a looming debt maturity wall with a new bond sale on Thursday. But it forked out for a chunky 10.5% coupon, more than three times what it currently pays, suggesting a much more punitive interest bill for the grocery delivery firm.
The British company sold £450 million ($576 million) of a five-year note, according to a person with knowledge of the sale, and the new bond was indicated higher on Friday at 102 pence on the pound. Shares in the company, however, dropped as much as 3.4%, underperforming a UK index.