Südzucker - Setting a Benchmark in the European Corporate Hybrid Market

Today, Südzucker - worlds biggest sugar producer and well placed food specialties producer -placed a EUR 500mn Hybrid Benchmark targeted to European Investors. The Hybrid is a perpetual instrument which is callable by Südzucker at par after year 10. The coupon of 5.25% is fixed for the first 10 years.

With the funds raised, Südzucker supports its investment offensive of more than 2 billions started two years ago to - amongst other - expand capacities in Bioethanol, Isomalt and Oligofructosis and thus to benefit from strong growing market demand in these markets.

The innovative structure is the first corporate hybrid to achieve a 75% Equity treatment by Moody»s (so called D-Basket treatment) and full equity credit for rating purposes by S&P. With the equity treatment from the rating agencies Südzucker materially strengthens its capital structure. In addition, the Südzucker hybrid structure is recognized as equity under IFRS and therefore also suits as an innovative source of equity from an accounting perspective.

Dr. Kirsch, Chief Financial Officer of Südzucker AG comments:» With the hybrid, we successfully broadened our funding sources and at the same time optimized the capital structure and cost of equity of the Südzucker group.»

Walter Henniges from Debt Capital Markets at Deutsche Bank comments:» Südzucker being positioned in the debt capital markets for years has clearly set the benchmark in the corporate hybrid market with this landmark transaction. Given the discussion in the market surrounding the hybrid product at the moment both on the investor and issuer side, Südzucker has chosen the ideal timing to place the issue».

The order book contained a wide range of institutional investors with a strong foothold in Germany and the UK.