Company raises debt to pay for acquisition.
Domain name company CentralNic (AIM: CNIC) has successfully raised €50 in a bond issue. It will use some of the money to complete its acquisition of Melbourne IT’s reseller business called TPP Wholesale. It will also pay down existing debt.
The bonds will pay the three-month EURIBOR plus 7%. Interest rates are actually negative in parts of Europe right now, so the EURIBOR is negative, but the bonds put a 0% floor plus the 7%. In other words, CentralNic is paying 7% right now but this could go higher.
They will mature in July 2023.
CentralNic also said its first four months of 2019 have been strong and it believes its full year will be head of market consensus.