Privatisation bonds

8 July 2003 By Hugo Dixon Follow @hugodixon

The state is tapping into the redhot convertible market to launch the biggest ever equitylinked bond. Almost ideal conditions allow it to set a 38% premium, pay a coupon of 0.75% and get shot of E5bn in a day.

This content is for Subscribers only

Context News

Germany is selling up to E5bn of bonds exchangeable into Deutsche Telekom shares, it said on Tuesday.

The transaction is being carried out via Kreditanstalt fuer Wiederaufbau, a German stateowned bank. KfW owns 12% of DT, which it previously bought from the German state. If the bonds all convert into shares, its stake will drop by 6.4%.

The German finance minister said last month that Germany might sell more DT shares direct to investors or to KfW next year.

The exchangeable bond will have a fiveyear maturity. It will offer a coupon of 0.75% and a conversion premium of 38%.

KfW has said it will raise E4.5bn from the bonds, with an option to increase it to E5bn. The full E5bn will be placed, according to a person close to the transaction.

The joint bookrunners on the deal, which is expected to close on Tuesday, are Deutsche Bank and JP Morgan.

Context News

Email a friend

Please complete the form below.

Required fields *