Birkenstock Holding PLC reported it is preparing its first bond sale in over five years, seeking to raise about €900 million ($1.4 bn) through seven-year notes that can be called after three years, according to an SEC filing. The company plans to use the proceeds to fund existing €429 million senior unsecured notes due 2029 and to fund strategic initiatives, including share buybacks and other corporate purposes.
The notes are expected to be guaranteed on the issue date on a senior unsecured basis by some of Birkenstock’s subsidiaries.
The deal will be Birkenstock’s first bond issuance since 2021, when it raised €430 million shortly before its sale to L Catterton, the LVMH-backed private equity firm that later took the company public in 2023.
As a result of the bond offer, Standard & Poor’s revised its debt rating outlook on Birkenstock to negative from stable while affirming its ‘BB+’ long-term issuer credit rating. At the same time, S&P assigned a ‘BB+’ issue rating on the new proposed €900 million senior unsecured notes due 2033 issued by Birkenstock Group B.V. & Co. KG with a recovery rating of ‘3’.
S&P said, “The negative outlook reflects Birkenstock’s limited rating headroom amid increased leverage pro forma for the transaction due to higher-than-expected discretionary spending in share buyback with adjusted leverage expected to approach 3.0x before deleveraging again toward 2.5x in 2027.”
Image courtesy Birkenstock
