Ferrari Pricing of Issue of Notes
On 14 May 2024, Ferrari announced the pricing of a €500 million issue of notes due in May 2030, which was more than twice oversubscribed. The notes are priced at 99.677% of their principal amount and carry an annual coupon of 3.625%. The funds raised will be used for general corporate purposes. Banco Santander, BNP Paribas, Citigroup, Crédit Agricole, J.P. Morgan, Mediobanca, and UniCredit acted as Joint Lead Managers. The notes are expected to be admitted to the Official List of Euronext Dublin and to trade on its regulated market by 21 May 2024.
- Ferrari's €500 million note issue was well over two times oversubscribed, indicating strong market demand.
- The notes carry a fixed annual coupon rate of 3.625%, providing a predictable return for investors.
- The issue price of 99.677% is close to the principal amount, suggesting confidence in the issuance.
- The proceeds will be used for general corporate purposes, potentially supporting future growth and operational flexibility.
- Multiple reputable financial institutions acted as Joint Lead Managers, adding credibility to the issuance.
- The fixed annual coupon of 3.625% may be considered relatively low in a higher interest rate environment.
- General corporate purposes are mentioned vaguely, providing no specific projects or investments to reassure investors.
- Future interest rate rises could decrease the attractiveness of the fixed-rate notes over time.
- Admitting the notes to the Official List of Euronext Dublin might involve additional regulatory and administrative costs.
Insights
Ferrari has announced a successful pricing of a
Oversubscription usually reflects positive market sentiment and indicates that investors see Ferrari as a reliable and low-risk investment. This can be particularly significant in times of economic uncertainty.
The fixed annual coupon of
The use of proceeds for general corporate purposes is somewhat vague, but it offers flexibility for Ferrari to allocate funds where needed, such as R&D or debt repayment. Investors will need to keep an eye on how effectively these funds are put to use to gauge the true benefit of this issuance.
Overall, the success of this note issue is a positive sign for Ferrari's financial stability and can potentially lead to enhanced investor confidence and potential stock price appreciation in the short term.
The issuance of the notes being over two times oversubscribed indicates a robust demand for Ferrari's debt instruments. The rate of 3.625% for a term of six years is competitive, considering current European market interest rates. This could imply that investors are betting on Ferrari's continued performance and prestige in the automotive market.
In the context of the luxury automobile sector, Ferrari's decision to secure funding aligns with industry trends where companies are leveraging low interest rates to bolster liquidity and invest in future growth. It will be important for investors to understand how Ferrari plans to leverage these funds against industry competitors like Lamborghini or Porsche.
Recent trends show increased investments in electric vehicle technology by luxury automakers. If Ferrari is planning to use some of this capital in developing EV technology or other innovations, this could enhance its market position. However, if funds are primarily used for general corporate purposes, the immediate impact might be less noticeable.
Overall, the successful issuance suggests investor confidence, but the long-term benefits will depend on strategic allocation of these funds.
Maranello (Italy), 14 May 2024 – Ferrari N.V. (NYSE/EXM: RACE) (the “Issuer”) today announces the pricing of a
Banco Santander S.A., BNP Paribas, Citigroup Global Markets Europe AG, Crédit Agricole Corporate & Investment Bank, J.P. Morgan SE, Mediobanca – Banca di Credito Finanziario S.p.A., and UniCredit Bank GmbH acted as Joint Lead Managers to the issue of the Notes.
Application has been made for the Notes to be admitted to the Official List of Euronext Dublin and to trading on the regulated market of Euronext Dublin. Settlement and issue of the Notes are expected to occur on 21 May 2024.
For further information:
Media Relations
tel.: +39 0536 949337
Email: media@ferrari.com
About Ferrari
Ferrari is among the world’s leading luxury brands focused on the design, engineering, production and sale of the world’s most recognizable luxury performance sports cars. Ferrari brand symbolizes exclusivity, innovation, state-of-the-art sporting performance and Italian design. Its history and the image enjoyed by its cars are closely associated with its Formula 1 racing team, Scuderia Ferrari, the most successful team in Formula 1 history. From the inaugural year of Formula 1 World Championship in 1950 through the present, Scuderia Ferrari has won 244 Grand Prix races, 16 Constructors’ World titles and 15 Drivers’ World titles. Ferrari designs, engineers and produces its cars in Maranello, Italy, and sells them in over 60 markets worldwide.
Disclaimer
This press release shall not constitute an offer to sell or a solicitation of an offerto buy the Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The Notes have not been and will not be registered under the Uniteci States Securities Act of 1933 (as amended), and may not be offered, sold, tendered, bought or delivered within the Uniteci States orto or for the account or benefit of U.S. persons absent registration or an applicable exemption from registration requirements.
This press release is directed only (i) at persons who are outside the United Kingdom, (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended or (iii) at persons falling within Article 49(2) (a) to (d) (‘high net worth companies, unincorporated associations, etc.’) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (all such persons together being referred to as ’relevant persons‘). This press release must not be acted on or relied on by persons who are not relevant persons. Any investment activity to which this press release relates is reserved for relevant persons only and may only be engaged in by relevant persons.
This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”). The Notes will be issued under a prospectus. The final form prospectus will be prepared and made available to the public in accordance with the Prospectus Regulation. The final form prospectus, when published, will be available at https://corporate.ferrari.com/en/investors/bond-info.
Relevant stabilisation regulations including Financial Conduct Authority/ICMA apply.
MiFID II professionals/ECPs-only/No PRIIPs KID
Manufacturer target market (MIFID II product governance and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as not the Notes are not available to retail investors in either the EEA or the UK.
This press release contains forward-looking statements. These statements are based on the Group’s current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: volatility and deterioration of capital and financial markets, changes in commodity prices, changes in general economic conditions, economic growth and other changes in business conditions, macro events, pandemics and conflicts, weather, floods, earthquakes or other natural disasters, changes in government regulation (in each case, in Italy or abroad), production difficulties, including capacity and supply constraints and many other risks and uncertainties, most of which are outside of the Group’s control.
FAQ
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