Mapfre has successfully closed the placement of senior debt securities for a total of 1 billion euros, which has been carried out in two tranches, of 6 and 10 years, with fixed interest rates of 3.125% and 3.625%, respectively.
- The transaction was executed in two tranches, of 6 and 10 years, with very attractive fixed interest rates of 3.125% and 3.625%, respectively
- Total demand was close to 5.3 billion, with great diversification in terms of geography and investor profile
- The funds raised will enable the company to refinance upcoming maturities, maintain financial flexibility, and diversify its sources of financing.
“This operation is testament to the confidence institutional investors have in Mapfre. We’re launching a new debt program under favorable conditions, thanks to the strength of our business model and the solid financial situation, which have recently been recognized by the main agencies with upgrades,”
Felipe Navarro, corporate director of Investor Relations, Capital Markets, and M&A at Mapfre.
The funds raised will allow the company to finance upcoming maturities, taking advantage of the current favorable situation in the fixed-income market to access long-term financing under attractive conditions, as well as to maintain its financial flexibility and diversify its sources of financing. The choice of a dual-tranche structure also sought to maximize the participation of different types of investors and optimize the final cost.
The success of the transaction, with an A- rating from Standard & Poor’s, was reflected in the strong appetite shown by investors. Total demand was close to €5.3 billion, which allowed Mapfre to significantly narrow the initial price for both bonds.
The first tranche — maturing in 6 years for an amount of €500 million — reached a demand of almost €3.4 billion, allowing the final margin to be set at 65 basis points over the mid-swap curve (reference index for this type of issue), resulting in a coupon of 3.125%.
The second tranche — with a 10 year maturity for an amount of €500 million — reached a demand of over €1.9 billion, managing to close with a spread of 87 basis points over the mid-swap. The final coupon was set at 3.625%.
The issuance was aimed exclusively at institutional investors, with retail investors expressly excluded, as is common practice in this type of operations, and the securities will be listed on the AIAF market when authorization is received from the Spanish National Securities and Exchange Commission (CNMV). The vast majority of investors that participated in the placement were mutual fund managers (56% of the total), followed by insurance companies and pension funds (25%). By geography, the greatest demand came from Germany (21%), BeNeLux (20%), United Kingdom (19%) and France (18%).
Citi accompanied Mapfre in this transaction as the global coordinator, while Barclays, BBVA, and Crédit Agricole CIB were active joint lead managers of the orderbook. Bank of America, ING, Banco Santander, Morgan Stanley, and Unicredit participated as passive joint lead managers.
With this transaction, Mapfre has inaugurated a new Euro Medium Term-Note (EMTN) debt program, a standardized framework for companies and government entities to issue debt (bonds) with flexibility in international markets.