Translation: Original published in Finnish on 9/8/2026 at 8:35 am EEST.

HKFoods announced on Monday that it is considering the issuance of a new bond to refinance its current 90 MEUR bond maturing next summer. We estimate that the refinancing will enable savings in financing costs as the company's financial position has strengthened in recent years following the earnings turnaround. The situation was already known, and the release therefore does not create any pressure to change our forecasts – at least not until precise information on the pricing of the bond is available. In addition to the refinancing, the company also entered into new bank loans, which we estimate will provide additional leeway for liquidity and investments.

Refinancing of the bond lowers costs

HKFoods announced that it is considering the issuance of a 90 MEUR bond and, at the same time, offers to buy back the existing notes related to the previous bond (totaling 90 MEUR). The current bond matures in June 2027, so the company is acting well in advance. The offer period for the tender offer is September 7–14, and correspondingly, the new bond issue is expected to take place in the near future, market conditions permitting.

We estimate that the refinancing of the bond will significantly reduce the company's interest costs. Our estimates assume that net financial expenses will decrease to 10 MEUR in 2027 (2026e: 13.8 MEUR), which would correspond to a decrease of ~3.5 percentage points in the bond's interest. The interest rate on the bond issued in 2024 is 3-month Euribor + 7.5 percentage points, but we estimate that the margin will now fall closer to the 4% level.

Maturity structure of liabilities (H1'26)

Source: HKFoods

Bank loans offer more room for maneuver

In the stock exchange release, the company mentioned that it has also agreed on a bank financing arrangement of 92 MEUR, which is partly a new element in the company's financial structure. The company's previous bank financing has consisted only of a revolving credit facility (RCF of ~20 MEUR), which the company did not have in use at all at the end of H1'26. The new bank financing arrangement includes a 20 MEUR term loan (3 years), a 50 MEUR revolving credit facility (RCF, 3 years), and a 22 MEUR ancillary facility. In addition, the package includes an uncommitted additional facility of 20 MEUR. Bank financing that is clearly larger than before could indicate growing investment needs, or on the other hand, it can be used to at least partially replace the use of commercial papers, which the company has utilized for short-term financing needs (H1'26: 12.8 MEUR).

The additional liquidity provided by bank loans could also partly facilitate the repayment of the hybrid bond (possible in autumn 2028), but this is also influenced by other factors (particularly the development of equity and the net gearing ratio). The bank loan covenants require HKFoods to maintain a net debt/EBITDA of less than 3.25x (2026e: 2.2x) and a net gearing ratio of less than 110% (74%). If the company were to redeem the hybrid loan immediately and not pay an additional dividend, the net gearing would rise to an estimated 94%, meaning it would still remain within the covenant limits. The company's business has developed favorably in recent years, but the development of equity has been held back by the company's generous dividend payments. However, we have interpreted that the company has the intention to redeem the hybrid in the fall of 2028.