By Rebecca Melvin
New York, July 23 – J Sainsbury plc priced £250 million of perpetual convertible bonds at par to yield 2.875% with an initial conversion premium of 30% on Thursday, according to a news release.
The Regulation S deal priced toward the cheap end of 2.5% to 3% coupon talk and at the cheap end of 30% to 35% premium talk.
Sainsbury also priced £250 million of a 6.5% non-convertible perpetual hybrid bond.
The convertible bonds will be optionally convertible until the first reset date in July 2021. After the first reset date, interest will increase in line with the non-convertible hybrid capital transaction to a rate equal to the then five-year swap rate plus an initial credit spread and step-up margin of 500 basis points, subject to a reset every five years.
The bonds are non-callable until July 2021 and then are callable every five years thereafter.
Deutsche Bank AG, London branch, Morgan Stanley & Co. International plc and UBS Ltd. were the joint bookrunners for the deals.
Proceeds of both offerings are earmarked for general corporate purposes, including via on-lending to subsidiaries and by way of contributions to the group’s pension funds.
Settlement is expected July 30. The company plans to list the convertibles on the Channel Islands Securities Exchange Authority Ltd.
Sainsbury is a London-based supermarket chain.
| Issuer: | J Sainsbury plc
|
| Issue: | Convertible bonds
|
| Amount: | £250 million
|
| Maturity: | Perpetual
|
| Bookrunners: | Deutsche Bank AG, London branch, Morgan Stanley & Co. International plc, UBS Ltd.
|
| Co-managers: | Banco Santander SA, Lloyds Bank plc, MUFG
|
| Concurrent offering: | £250 million 6.5% non-convertible hybrid bond
|
| Coupon: | 2.875%
|
| Price: | Par
|
| Yield: | 2.875%
|
| Conversion premium: | 30%
|
| Conversion price: | 348.6417 pence
|
| Calls: | Non-callable for until July 2021 then callable every five years thereafter
|
| Price talk: | 2.5%-3% yield, up 30%-35%
|
| Pricing date: | July 23
|
| Settlement date: | July 30
|
| Distribution: | Regulation S
|
| Listing: | London: SBRY
|
| Stock reference price: | 266.60p
|
| Market capitalization: | £5.20 billion
|
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