The world’s best borrowers in 2006
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Bayer: building its business through clever use of debt markets |
Corporate capital market activity has changed dramatically since the glory days of the European debt market at around the turn of the century. Then corporates piled on debt with vigour to finance M&A, but then came the downturn in credit and ever since investors and borrowers have been more careful. Bayer might have been highly acquisitive of late but it generally pursues a prudent debt management strategy aimed at ensuring flexibility. The company made two landmark trades during the past 12 months that mean that it stands out from the rest of the investment grade corporate sector. The first was the sale of €1.3 billion of hybrid bonds in July 2005. This was the biggest corporate hybrid and enjoyed textbook execution. The deal was a balance sheet strengthening operation designed to deal with its €2.4 billion acquisition of Roche-OTC. The rating agencies had voiced their concern that the healthcare and chemical company’s financials were stretched for its single A rating (A3/A – Moody’s and S&P).