By Evan Weinberger
New York, July 11 - Fortis priced €2 billion in conditional capital exchangeable notes that will convert into mandatory convertible securities pending a rights issue linked to Fortis' attempted takeover of ABN Amro.
The deal priced Tuesday after the market close in Europe.
The capital exchangeables have a coupon of three-month Euribor plus 15 basis points.
They will exchange into mandatory convertible securities when Fortis completes a qualifying preferential rights issue to existing holders of Fortis shares as part of the funding for its acquisition of ABN Amro.
If that rights issue does not occur, the notes will be redeemed at par on Aug. 4, 2008.
The capital exchangeables came in at the rich end of talk, which had a coupon at three-month Euribor plus 15 to 20 bps.
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.
Those mandatories will convert three years from the conversion date.
The coupon is 8.75%, which is towards the cheap end of talk, which put the coupon at 8% to 9%.
The convertible securities will have a minimum conversion price equal to the reference price, or the 30-day volume weighted average price of Fortis stock for the period starting seven days after completion of the rights issue. The maximum conversion price will be 120% of the reference price.
The mandatories will convert into Fortis shares.
Fortis Bank nv-sa, Fortis Bank Nederland (Holding) N.V., Fortis Bank SA/NV and Fortis N.V. 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."
Conditional Capital Exchangeable Notes
Issuers: Fortis Bank nv-sa, Fortis Bank Nederland (Holding) NV, Fortis Bank SA/NV and Fortis NV
Issue: Conditional Capital Exchangeable Notes
Amount: €2 billion
Exchange deadline: Aug. 4, 2008
Coupon: Three-month EURIBOR plus 15 bps
Price: Par
Yield: Three-month EURIBOR plus 15 bps
Pricing date: July 11
Settlement date: Aug. 2
| Bookrunner: | Merrill Lynch International
|
| Co-Bookrunner: | Fortis
|
| Distribution: | Regulation S
|
| Talk: | Three-month Euribor plus 15 to 20 bps coupon
|
|
|
| Mandatory Convertible Securities
|
| Issuer: | Fortis Bank nv-sa, Fortis Bank Nederland (Holding) NV, Fortis Bank SA/NV and Fortis NV
|
| Issue: | Mandatory convertible securities
|
| Amount: | €2 billion
|
| Maturity: | Three years after issue
|
| Coupon: | 8.75%
|
| Minimum conversion price: | Par of reference price, the 30-day volume weighted average price of Fortis stock for the period starting seven days after completion of the rights issue
|
| Maximum conversion price: | 120% of reference price
|
| Talk: | 8%-9% coupon
|
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