Nashville, Sept. 2 - France Telecom SA sold a €1 billion offering of convertible bonds due Jan. 1 2009 in the Oceanes structure to yield 1.6% with a 35.5% initial conversion premium.
Goldman Sachs, BNP Paribas and Societe Generale were the lead managers.
The Regulation S deal priced in the middle of yield talk for a 1.35% to 1.85% coupon and at the more aggressive end of premium guidance of 32% to 37%.
The bonds were sold alongside an offering by the French government of 236 million shares in France Telecom, equivalent to a 9.57% stake. The share sale could be increased to 299 million shares, or a 12.13% stake, if the greenshoe is exercised.
Deal materials noted that the France Telecom issue is the largest European equity-linked deal in 2004. The materials said the deal included extremely aggressive terms given the 27.5% implied volatility level.
Deal managers said there was high demand with allocations well balanced between outright and hedge fund participation as well as French and U.K. investors. The managers said the books were about three times oversubscribed.
Terms of the deal are:
| Issuer: | France Telecom SA
|
| Issue: | Convertible Oceanes bonds
|
| Lead managers: | Goldman Sachs, BNP Paribas and Societe Generale
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| Amount: | €1 billion
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| Greenshoe: | €150 million
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| Maturity: | Jan. 1, 2009
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| Coupon: | 1.6%
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| Conversion premium: | 35.5%
|
| Conversion price: | €25.81
|
| Conversion ratio: | 100.00
|
| Call: | Callable from Jan. 1, 2007, at par with a 130% hurdle
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| Pricing date: | Sept. 2
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| Announcement date: | Sept. 10
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| Distribution: | Regulation S
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| Price talk: | Yield: 1.35%-1.85%
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| Premium: 32%-37%
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