Flora Food Group in a Pioneering Move Breaks Boundaries with €400 Million Unsecured Bond Offering in the Nordic Region

In an intriguing move that tests the depth of the Nordic high-yield market, Flora Food Group, known for brands like Becel and ‘I Can’t Believe It’s Not Butter’, recently executed its largest ever deal in the region. In late June, the group initiated an audacious €400 million debut offering of unsecured bonds at 8.625% to refinance subordinated bonds, a step taken to support KKR’s €6.8 billion carve-out of Unilever’s spreads unit in 2018.

The offer, rated CCC+/Caa1/CCC+, priced at the tight end of 8.625-8.875% IPTs on June 30, was part of a four-day marketing venture. Moreover, the deal marks the first euro bond for a KKR portfolio company issued under Norwegian law. This ground-breaking move demonstrates the growing allure of the high-yield market that is not typically the prime destination for top-tier sponsors.

This incursion into the Nordic market marks Flora’s strategic diversification of funding sources as the realm has observed rapid growth in recent years. In the first quarter of the year, the market saw issuers print roughly €7.5 billion of local law high-yield bonds, nearly doubling the amount from the same period last year, setting a first-quarter record.

While the majority of issuances still originate from the Nordic region, the Flora deal hints at an emerging trend wherein companies outside the region are increasingly shifting towards the Nordic financing market for funding. Such a strategic pivot can lead to robust cross-regional financial collaborations and unlock the untapped potential of lesser-explored markets globally. The novelty of this approach suggests a potential reshaping of financial norms, expanding horizons beyond traditional frameworks. With such ventures, the global financial landscape seems to be breaking new ground, paving the way for diversification and innovation.