Rolls-Royce Holdings is preparing to return to the euro debt market for the first time in six years as it lines up financing intended to help insulate the business from ongoing disruptions linked to the Middle East conflict.
According to a person familiar with the matter, the company has appointed banks to manage a dual-tranche offering denominated in euros with maturities of five years and ten years. Investor calls are scheduled for Monday, and the money raised is to be allocated to general corporate purposes.
The banks named to arrange the transaction include BNP Paribas, Credit Agricole CIB, Goldman Sachs International, Lloyds Banking Group, Banco Santander and Societe Generale.
In a trading update released last month, Rolls-Royce said it expects to be able to fully offset the current financial effects of business disruption stemming from the conflict. The company said it would put measures in place to protect operations from those disruptions while holding to its full-year 2026 targets.
Rolls-Royce reiterated its 2026 guidance of underlying operating profit in a range of A34.0 billion to A34.2 billion and free cash flow of A33.6 billion to A33.8 billion. The firm indicated it will implement steps to shield the business from the disruption and to preserve those guidance ranges.
Summary
Rolls-Royce is preparing a euro-denominated bond sale featuring five- and ten-year tranches, with proceeds intended for general corporate purposes. The move marks the company's first euro bond transaction since 2020 and comes as it seeks to mitigate the financial impact of disruptions associated with the Middle East conflict while maintaining its 2026 profit and cash flow guidance.
Key points
- Rolls-Royce plans a dual-tranche euro bond offering with five- and ten-year maturities; investor calls are scheduled for Monday.
- The proceeds from the debt sale are intended for general corporate purposes.
- The company has confirmed it expects to fully offset the current financial effects of business disruption from the Middle East conflict and will keep its 2026 guidance ranges for underlying operating profit and free cash flow.
Risks and uncertainties
- Ongoing business disruptions linked to the Middle East conflict could continue to affect operations and financial results; the company says it is implementing protective measures but the situation remains a source of uncertainty.
- The timing and outcome of the debt offering are subject to market conditions and investor demand; details beyond scheduled investor calls were not provided.
- Although Rolls-Royce has maintained its 2026 guidance, the company B9s ability to fully offset the current effects depends on the effectiveness of measures it will implement.
Deal arrangers
BNP Paribas, Credit Agricole CIB, Goldman Sachs International, Lloyds Banking Group, Banco Santander and Societe Generale have been appointed to arrange the debt sale.