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Turning to the wider treasury, Deutsche Post’s strong financials, and credit ratings of BBB+ (Fitch, 11 May 2020) and A3 (Moodys Investor Service, 8 October 2020), have helped it prepare for pandemic disruption – long before coronavirus made its impact.
DPDHL has a committed undrawn €2bn credit facility maturing in 2023, which Deutsche Bank was instrumental in setting up. In the 2019 Annual Report it was described as guaranteeing the company “favourable market conditions and acts as a secure, long-term liquidity reserve”.
While there was, says Hänche, “no need to draw upon the syndicated loan and there was also no need to issue a bond”, he adds that “the longer the pandemic continued [meant] we decided to go out and issue long-term bonds just in case” and also to retain “fire power”. With investors looking for high-quality issuers, in May 2020 DPDHL issued a multi-tranche senior bond, led by Deutsche Bank as joint bookrunner, with a total volume of €2.25bn. Chief Financial Officer Melanie Kreis commented that “the successful transaction shows that investors are convinced of our resilient business model and our successful future.”13
“We shall continue to grow in the years ahead, even in a volatile economic climate,” predicted CEO Frank Appel in the 2019 Annual Report. While nobody could have predicted quite how volatile 2020 would prove, DPDHL is clearly ready for anything.
Henrik Hänche, Head of Corporate Finance, Deutsche Post DHL Group is the featured guest in Deutsche Bank Research’s Behind the Headlines podcast series, presented by Fundamental Head of Credit Strategy Jim Reid
Listen to the podcast here
With thanks to Deutsche Post DHL for the kind permission to reproduce the photography of their operations.