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A Green Schuldschein: pieces of the puzzle falling into place

Euromoney Seminars spoke to Klaas Springer, Global Director Treasury of Royal FrieslandCampina, on its Green Debt instrument issued in April 2016

Klaas Springer will be speaking at the upcoming International Schuldschein Forum 2017, taking place on 29th & 30th March 2017.  To hear from his and our line-up of other industry leading speakers you can secure your place here or email 

Why did FrieslandCampina enter the Schuldschein market?

First of all, for a company like FrieslandCampina with no public credit rating, there are not so many options open for raising long term debt. For maturities longer than 5 years, it’s basically US Private Placements, public bonds, Euro PP and Schuldschein. We were since 2003 in the US PP market and already had over 20 US investors (and 1 European), i.e. a market lying open for us. Public bonds on an unrated basis are- pricing and execution risk wise- not yet interesting. Whereas the Schuldschein compared to Euro PP, really provides depth of market in the European setting. The Schuldschein – generally translated as a German certificate of indebtedness – is, if you ask me, the opportunity to create a European PP market comparable to the one in the US. There are already many international investors active in this market. Yes, lean and comprehensive documentation certainly appealed to us. But this should be no reason for certain investors to avoid this market. Actually FrieslandCampina adjusted the Schuldschein format in order to accommodate insurance companies and fund managers by including for example financial covenants, thereby living up to the promise of equal treatment of all our investors.

The Schuldschein market was thus strategically the logical choice for us as it provided the opportunity for diversification in terms of market and attracting new European and Asian investors, at pricing comparable to the USPP market and at the same time benefiting from our strong German footprint: factories, brands and member farmers.

Why the Green label?

Sustainability is an intrinsic part of our corporate strategy. The dairy sector has to move and we as a company want to grow in a climate neutral way. Our member farmers that own the company are part of this effort and the sector has agreed upon the Dairy Sustainability Framework (DSF) to get going. FrieslandCampina wants to show leadership in this area by reducing its environmental footprint, develop healthier products and dairy development. A Green issue would enable us to radiate this message. Yes, it is also good for marketing and reputation building, but in the end you want investors to view that everything we are doing is Green.
At the same time we noticed that Green attracts the attention of a new group of investors. And especially European investors have an extra incentive to sit at the table with us. Therefore we can say that pieces of the puzzle have fallen into place with the Green Schuldschein. We can make the connection between finance and strategy, sustainability and maintain the strategic goal of funding diversification.

What has been your experience with this new market?

As a first time issuer in this market we have experienced this market as maybe a bit less flexible than the USPP market, but very robust. Advised by our arranging banks we offered a certain range of spreads for pricing to investors on the basis of which they started their own credit and decision-making process, which was expected to take 3 to 4 weeks. It was not meant to adjust this spread range during this process, although Mr. Draghi had made some important moves at the time. Nevertheless, we are overall very satisfied with this transaction which resulted in heavy oversubscription, pricing at the bottom of the range and strategically most important a well-balanced distribution:

  • Traditional Schuldschein investors 58%
  • Europeans insurance companies and fund managers 28%
  • Asian investors 14%

Moreover, with 60% allocated to investors with a clear sustainability signature, a percentage much higher than expected beforehand, the Green label has definitely been worthwhile.


This content is provided by Euromoney Seminars for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.