Comment: 138 billion euros in debt – Telekom is doing the opposite of what is necessary

One DAX company reduces debt, the other pays dividends and buys back shares. The stock market and the bond market are showing which strategy is now taking bitter revenge.

Telekom boss Tim Höttges: With net financial debt of 138 billion euros, his company is more indebted than any other German listed company. (Archive image) Photo: Oliver Berg/dpa

At the turn of the year 2022/23, Fresenius had accumulated net financial debt of 24.7 billion euros. The heavily indebted healthcare group therefore had to offer a lot for fresh money: Fresenius issued a 500 million euro bond in 2023 with a coupon of 5.125 percent. It couldn't be cheaper.

This bond is traded daily on the market. Currently, in times of rapidly rising interest rates, their annual return is only four percent. That is roughly the interest rate that Fresenius would have to pay today for a new bond with a similarly long term. Fresenius benefits from the fact that the group's debt has now more than halved to ten billion euros.

The situation is different for highly indebted companies such as Eon and Deutsche Telekom. In 2024, the energy company issued a bond for one billion euros with a term until 2044 and a nominal interest rate of 4.125 percent. This bond now yields 4.8 percent on the market.

Hardly any effort to reduce debt

In 2025, Telekom issued a bond with a coupon of 3.625 percent that runs until 2045. It is currently trading at 4.8 percent.