Coca-Cola HBC AG’s defection to London from Athens for its main stock listing is being rewarded by bond investors and the world’s second-biggest bottler of the soft drink is now planning to take advantage.
The company intends to sell bonds in euros over the next six to nine months, Chief Financial Officer Michalis Imellos said last week.
The extra yield on its 4.25 percent bonds due November 2016 compared with benchmark German bunds has dropped 131 basis points since October 11, when it announced the listing.
The average yield premium for investment-grade euro company bonds fell 60 basis points over the same period.
“Relisting in London and highlighting the fact it’s truly more internationally diversified will help the sentiment behind Coca-Cola Hellenic,” said Nicholas Kordowski, an investment director at Standard Life in Edinburgh.
“People will be less concerned with the spread volatility.”
The move distances Coca-Cola HBC, which generates more than 90 percent of its sales outside Greece, from the collapse of financial markets in a country that became the byword for the European debt crisis.
At the same time, corporate borrowing costs dropped to a record after the European Central Bank cut its benchmark interest rate to 0.5 percent last week as it tries to lift the euro region out of recession.
The average yield on investment-grade euro corporate bonds fell to an unprecedented 1.76 percent this week, Bank of America Merrill Lynch bond indices show.
Coca-Cola HBC said the London stock listing is designed to access a wider pool of investors.
It also is seeking to extend the company’s debt to an average maturity of about five years, Imellos said in an interview on April 29, the day the soft drink bottler’s stock debuted on the London exchange.
“We all know the current environment is good” for bond sales, Chief Executive Officer Dimitris Lois said.