Piazza Hotels & Residences, a medium-sized domestic hotel group, recently finalized, with the support of Invitalia, the issue of a bond loan.
The operation, one of the first in Italy, includes the subscription by Invitalia (through the “Fondo Patrimonio PMI”) of the newly issued bonds. The redemption of the bonds takes place at the end of the sixth year from subscription and provides for a rate of 1.75% for the first year, 2.00% for the second and third years and 2.50% for the remaining three years, with interest deferred paid annually. There is also a bonus (5% reduction of the reimbursement value for each objective) if the company reaches a series of targets related to: employment, environment, and technology.
The group aims at achieving one of these targets precisely, in order to obtain the bonus of 5% (of the reimbursement value) thus reducing the overall cost of the loan which would result, in fact, in the cancellation of the value of the interest of the last two years (rate at 2.50%). The average annual rate would therefore go from 2.20% to 1.375%.
This (finite) rate, considering the current cost of bank debt, makes the operation very competitive.