The issue of bonds is postponed until autumn.
Czech Railways (CD) postponed one of its key transactions until this fall. The state-owned carrier had planned to issue bonds worth EUR 550 million in June; it eventually moved the issue due to the June accident involving a pendolino train at Bohumin station. The announcement was made on the London Stock Exchange.
CD plans to return to the issue in the fall months, i.e. after the evaluation of the documents related to the pendolino accident and after the end of the summer holidays on the financial markets.
400m bond issue due next year
CD needs to obtain billions of CZK by next May when the 2016 bonds mature. For the first time, the railways will offer so-called green bonds (ESG) on the market.
The expectations of future bond holders in terms of sustainability will be bank-monitored. Czech Railways CEO Michal Krapinec expects the carrier to reach a lower interest rate on the green bonds than on the conventional ones, although not lower than the 2016 issues with an interest rate of 1.875 percent.
The net debt of the joint-stock company currently amounts to CZK 31.67 billion (cca EUR 1,3 billion). The debt to gross operating profit (EBITDA) ratio is 5.5, which is “at a healthy level” according to Mr. Krapinec. Over the next ten years, the railways intend to invest around CZK 100 billion (cca EUR 4 billion) in rolling stock.
Edited and translated by Lucie Trávníčková.