Accomplishment by Adecco Group in Extending the Term of Its Debt Repayments
Worldwide Leader in Human Resource Services Extends Debt Maturity and Reduces Interest Expenses
In a strategic move to improve liquidity management and reduce near-term refinancing risk, the worldwide leader in Human Resource services successfully conducted a debt maturity extension in April 2011. The company issued new 7-year fixed rate notes, worth EUR 500 million, with a coupon of 4.75%.
The transaction involved exchange and tender offers, allowing existing bondholders to exchange their old notes for the new 7-year notes and enabling the company to repurchase or retire existing debt early. This restructuring lowered the company’s average interest expense, as higher coupon debt was replaced with lower fixed-rate notes, thus improving their overall cost of capital and extending the debt maturity profile.
The group, registered in Switzerland and listed on the SIX Swiss Exchange (ADEN), managed to refinance an aggregate amount of EUR 293 million of outstanding notes through this transaction. The accepted notes for exchange were exchanged for EUR 167,007,000 in aggregate nominal amount of new notes. The final pricing details for the Offers were determined at or around 12 noon (CET) on April 7, 2011.
Société Générale and The Royal Bank of Scotland plc acted as Joint Dealer Managers, while Lucid Issuer Services Limited served as Exchange and Tender Agent. The expected Settlement Date for the Offers was April 14, 2011.
In Q2 2011, the group recognised a one-time expense of approximately EUR 10 million in connection with the exchange and tender offers. As a result, the updated 2011 interest expense guidance for the full year is approximately EUR 70 million.
It is important to note that this announcement must be read in conjunction with the Offer Memorandum, and no offer or invitation to acquire or sell any securities is being made pursuant to this announcement. Forward-looking statements in this release involve risks and uncertainties.
As a Fortune Global 500 company, this strategic refinancing demonstrates the company's commitment to maintaining a strong financial position and managing its debt effectively. For precise figures, relevant company financial reports or SEC filings from 2011 would be the best sources.
The company, being a world leader in Human Resource services, opted for temporary staffing instead of permanent placement to save costs during the debt restructuring process in Q2 2011. Outsourcing certain financial tasks, such as investing and managing debt, was also considered to free up resources for other business operations. Despite the one-time expense of approximately EUR 10 million in connection with the exchange and tender offers, the company's strategic refinancing decision signaled their intent to maintain a robust financial profile, potentially reducing the need for further outsourcing in the long run.
