Pension funds buy into Clariant bond issue

SWITZERLAND – A significant amount of pension fund money went into Swiss chemical firm Clariant’s new UK-listed seven-year €600m Eurobond.

According to Clariant, while an “insignificant” amount of pension funds bought bonds directly, a large amount of fund managers and custodial banks bought bonds on behalf of their scheme clients.

According to the investor distribution analysis, 65% of buyers were fund managers, 2% were pension funds and 23% were banks.

The UK dominated the regional allocation with 50%, while Switzerland had just 10%. Germany had 12%, France had 6% and the Netherlands had 4%. Luxembourg, Finland and Norway each had a 2% allocation.

The isse was rated Baa2 and BBB by Moody's and S&P respectively.

Clariant stated it was trying to achieve "a good balance" between the buyers, which include pension funds, some proportion of hedge funds, investment managers, insurance companies and banks.

According to the company, the order book grew to €3.3bn within 24 hours of book building following a marketing roadshow in London, Paris, Frankfurt, Munich, Amsterdam, Zurich and Basil.

The bond pays a coupon of 4.375%, and was issued at a price of 99.628%, offering investors a spread of 86.6 basis points over the relevant underlying German government bond, according to a Clariant statement.

The bonds will be listed on the London Stock Exchange. ABN Amro, Citigroup and UBS jointly managed the deal.

The bond issuer was Luxembourg-based Clariant Finance. The maturity date is 5 April 2013.