Femsa talks €500 million three-year exchangeables for Heineken shares at 2.375%-2.875%, up 25%-30%

By Abigail W. Adams

Portland, Me., Feb. 16 – Fomento Economico Mexicano SAB de CV (Femsa) plans to price an offering of €500 million three-year bonds exchangeable for Heineken Holding NV shares on Friday with price talk for a coupon of 2.375% to 2.875% and an initial exchange premium of 25% to 30%.

BofA Securities, Goldman Sachs International and Morgan Stanley are joint bookrunners for the Regulation S offering.

The bonds are non-callable for two years and then subject to a 130% hurdle.

The company will settle the notes in cash, shares or a combination of both.

The bookrunners will organize a simultaneous placement of Heineken shares to facilitate hedging activity.

Concurrently Femsa subsidiary CB Equity LLP is pricing a secondary offering of €3 billion of shares of Heineken NV and Heineken Holding NV with investors given the opportunity to acquire shares in either.

Heineken NV will purchase at least €707 million of shares of Heineken NV and €296 million of shares of Heineken Holding NV.

L’Arche Green NV, which the Heineken Family uses to exercise control over Heineken Holding NV, will participate in the equity offering.

Proceeds will be used for general corporate purposes and liability management exercises.

Femsa is a Monterrey, Mexico-based beverage and retail company.

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