PRAGUE, June 26 (Reuters) - Czech defence and industrial company Czechoslovak Group on Thursday more than doubled its dual-tranche 2031 bond issue to 1 billion euros and $1 billion in response to strong investor demand, the company said.
The bonds - senior secured notes - were initially marketed at a minimum of $500 million and 350 million euros but this was increased after demand exceeded the offer by more than four times, CSG said.
The notes will carry a yield of 6.5% for the dollar tranche and 5.25% for the euro tranche, the company said.
CSG, owned by 32 year-old Czech billionaire Michal Strnad, has grown rapidly mainly due to a surge in demand for ammunition and defence equipment amid the war in Ukraine. More than 40% of CGS's revenue in 2024 was from Ukraine.
The company has been on an acquisition spree to expand and vertically integrate its ammunition and other production, and has been investing to raise capacity in its trucks and heavy military equipment businesses.
Last year, CSG completed a $2.2 billion acquisition of U.S. small-calibre ammunition maker The Kinetic Group.
CSG's operating EBITDA rose by 109% year-on-year in the first quarter of 2025 to 378 million euros on organic growth and consolidation of The Kinetic Group.
CSG projected an increase in revenue to 6.7 billion euros this year from 4 billion last year, it said on Thursday.
CSG said proceeds from the bond issue will be used to redeem existing $775 million senior secured floating-rate notes, for general corporate purposes plus fees and expenses.
Financial news service IFR said the issue was led by BNP Paribas BNPP.PA, J.P.Morgan JPM.N and Morgan Stanley MS.N.
The issue was given the highest speculative grade ratings of Ba1 by Moody's and BB+ by Standard and Poor's, and the lowest investment-grade rating of BBB- by Fitch, the company said.
Earlier this month, CSG issued a 10 billion crown, 5.75% bond due in 2030 on the local Czech market.
(Reporting by Jan Lopatka. Editing by Jane Merriman)
((jan.lopatka@thomsonreuters.com; +420 234 721 614; Reuters Messaging: jan.lopatka.thomsonreuters.com@reuters.net))
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