Cloetta to redeem senior secured notes via SEK 1 billion bridge loan

By Susanna Moon

Chicago, July 25 – Cloetta AB (publ) plans to redeem its senior secured notes issued in September 2013 using proceeds of a SEK 1 billion bridge loan.

The proposed redemption will likely occur in September, according to a company announcement.

Cloetta said it has obtained SEK 3.7 billion of term and revolving facilities with four lenders, with proceeds to be used to help refinance its bank financing.

The facilities consists of a €175 million three-year term loan, a €120 million five-year revolving credit facility and a SEK 1 billion one-year bridge loan.

The transactions are expected to reduce the group’s net financial items by about SEK 140 million over a five-year period, with SEK 50 million in 2017, the company noted.

The new agreement is unsecured and, accordingly, the remaining security afforded to the holders of the senior secured notes will be released in connection with the refinancing of the company’s existing bank financing.

The removal of all security over Cloetta’s assets is intended to increase operational flexibility and reduce costs for Cloetta, the company said.

In the third quarter of 2016, Cloetta will recognize one-off expenses in net financial items of about SEK 60 million for the termination of the old credit facilities, the establishment of the facilities agreement and the redemption of the senior secured notes.

Cloetta is a Kista, Sweden-based chocolate and sugar confectionery company.

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