Taaleri redeems 15 MEUR bond issue

Translation: Original comment published in Finnish on 9/2/2024 at 8:29 am EEST.

Taaleri announced the redemption of its 15 MEUR Tier 2 bond. The principal on the loan issued in 2019 would have matured in 2029, but under the terms of the loan, the interest rate would have risen sharply starting next month. 

In the stock exchange release, the company did not say whether it intended to repay the loan from its cash resources. At the end of Q2, Taaleri had about 23 MEUR in cash, and a 15 MEUR redemption would eat up most of it. Another option is to use at least part of the company's existing credit line, which we estimate would have a much lower interest rate than the current bond rate.

It is therefore difficult at this stage to determine the exact impact on our earnings forecasts for the coming years, but the positive impact will be in the order of a few percent at most. Our current earnings forecasts do not yet include the new 30 MEUR credit facility, on which the company has to pay a moderate interest rate even if the facility is not used. This is a standard condition in credit line agreements. Our view of the company remains unaffected by this news.