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Fortis sets terms for exchange of CCENs into mandatory convertibles due 2010; exchange to take place Dec. 7
By Evan Weinberger
New York, Dec. 5 - Fortis announced the terms for the exchange of its €2 billion in conditional exchangeable notes due into mandatory convertible securities due Dec. 7, 2010 Wednesday. The original CCENs priced in July.
The principal of each MCS is €250,000.
The initial minimum conversion price is €18.9777.
The initial maximum conversion price is €22.7732.
The initial conversion property is 105.386849 billion shares.
The initial conversion property value is €2 billion.
The exchange date is Dec. 7.
The CCENs will pay interest up to but excluding the exchange date. Interest on the CCENs will be paid on the exchange date.
Merrill Lynch International is the bookrunner and Fortis is the co-bookrunner for the Regulation S transaction.
Under the terms of the exchange, if the initial conversion property value is less than the outstanding principal amount of the convertible exchangeable notes, then the exchangeables will convert into mandatory convertible securities equal to the initial conversion property value plus a cash payment equal to the difference in the amount.
The coupon is 8.75%, which is towards the cheap end of talk, which put the coupon at 8% to 9%.
The mandatories will convert into Fortis shares.
Fortis Bank nv-sa, Fortis Bank Nederland (Holding) NV, Fortis Bank SA/NV and Fortis NV are joint issuers of the conditional capital exchangeable notes.
Fortis said the transaction allows it to "proactively address its planned capital needs through a contingent instrument that will not result in a capital issuance unless required."
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