Paratus Diversifies Funding with Nordic ABM Bond Listing

Paratus, a leading technology and energy company, has announced its plans to list Senior Secured Bonds on the Nordic ABM (Alternative Bond Market). This strategic move aims to diversify Paratus' funding sources, reduce reliance on traditional bank loans, and improve liquidity. The listing is expected to enhance Paratus' credit rating and lower borrowing costs, aligning with the company's balanced investment approach.

The Nordic ABM is known for its deep liquidity and diverse investor base, providing Paratus with access to a broader range of capital. This move enables Paratus to tap into the European capital markets, potentially attracting more investors and facilitating future fundraisings. The listing of Senior Secured Bonds on the Nordic ABM allows Paratus to secure long-term financing, providing stability and flexibility in its capital structure.

Paratus' Senior Secured Bonds offer investors a 6.5% coupon rate, maturing in 2026. The bonds are secured by a first-priority lien on Paratus' assets, ensuring priority repayment in case of default. This compares favorably to the average corporate bond yield of around 4.5% (as of 2024). However, the bonds' 10-year duration is longer than the average corporate bond duration of 7.5 years, exposing investors to higher interest rate risk. Additionally, the bonds' BB+ rating indicates a higher credit risk compared to investment-grade bonds.

Paratus' financial health and creditworthiness significantly impact the risk profile of its Senior Secured Bonds. As of Q1 2023, Paratus reported a strong balance sheet with a debt-to-equity ratio of 0.45, indicating a healthy mix of debt and equity financing. Additionally, its interest coverage ratio stood at 5.2, suggesting a robust ability to meet its debt obligations. Paratus' credit rating, currently at BBB+ by S&P, reflects its solid creditworthiness. These factors contribute to a lower risk profile for its Senior Secured Bonds, making them an attractive investment option for risk-averse investors seeking stable returns.

The listing of Senior Secured Bonds on the Nordic ABM allows Paratus to access a broader investor base, potentially leading to increased capital for strategic expansion. This move could facilitate Paratus' growth plans, such as expanding its data center footprint or investing in new technologies. However, the success of this strategy depends on factors like market conditions and Paratus' ability to manage its debt obligations effectively.

In conclusion, Paratus' listing of Senior Secured Bonds on the Nordic ABM is a strategic move that aligns with the company's balanced investment approach. This move enables Paratus to diversify its funding sources, improve liquidity, and potentially lower borrowing costs. The listing is expected to enhance Paratus' credit rating and attract more investors, supporting the company's growth and sustainability.