Are there any covenant restrictions or covenants that could affect future financing or dividend policy?

The prospectus for Tecan’s CHF 150 million straight bond does not spell out the exact covenant package, but straight senior notes in the European market almost invariably carry a standard set of negative covenants. These typically include a debt‑incurrence limitation (e.g., a maximum net‑debt‑to‑EBITDA or net‑debt‑to‑Equity ratio) and a dividend‑restriction clause that bars the company from paying dividends, repurchasing shares, or making other equity‑return‑type distributions if a defined leverage threshold is breached. In practice, such covenants are designed to preserve senior‑credit quality and give bondholders a “first‑look” on the firm’s balance‑sheet capacity. If Tecan’s post‑issuance leverage climbs toward the covenant‑set ceiling—perhaps due to a larger‑than‑expected R&D spend or an acquisition—its ability to raise additional senior debt or to resume a generous dividend policy could be temporarily curtailed.

From a trading perspective, the implicit covenant constraints create a credit‑risk ceiling that can be priced into the bond and, indirectly, into the equity. Investors should watch two key signals: (1) quarterly leverage metrics (net‑debt/EBITDA) relative to the likely covenant trigger; and (2) any corporate announcements about share buy‑backs or dividend changes. A breach—or even a credible threat of breach—could push the bond spread wider and put downward pressure on the stock, especially if the market anticipates a suspension of dividend payouts. Conversely, if Tecan stays comfortably under the covenant limits while delivering solid organic growth, the reduced financing risk may support a tighter spread and a modest upside in the equity, making the bond a relatively safe short‑to‑medium‑term hold. Keep an eye on the official indenture once it is published to confirm the exact ratios, but the typical covenant framework already suggests a modest, yet material, influence on future financing flexibility and dividend policy.