Nokia redeems 800 million euros worth of senior notes

Finnish telecom equipment maker Nokia today said it will redeem senior notes worth 800 million euros (over Rs 6,423 crore) as part of its plan to reduce the interest outgo.
"The 800 million euro senior notes issued in March 2013 by Nokia Solutions and Networks Finance BV, the finance company of its Networks business formerly known as NSN, will be redeemed," Nokia said in a statement.
Senior notes, a type of debt instrument, are accorded high preference in the event a company goes into liquidation.
The capital structure optimisation programme, announced on April 29, 2014, focuses on reducing interest bearing debt among other things.

"Nokia has announced that it plans to reduce interest bearing debt by about 2 billion euros by the end of the second quarter 2016," it said.
Once complete, the debt reduction is expected to result in annual run rate savings of at least 100 million euros related to recurring interest costs, it added.

Further, lowering its gross debt level is aligned with Nokia's long-term target to return to being an investment grade company, it said.
The redemption of the 800 million euro senior notes will result in annual interest expense savings of about 55 million euros, starting in the third quarter 2014.

"The redemption of the notes is also expected to result in a one-off cost of about 100 million euros impacting the second quarter 2014 results of the company," it said.
The redemption will be completed on or about June 19, 2014.