ABB starts exchange for bonds due 2008, 2009

New York, Dec. 1 - ABB said it has begun an offer to exchange its €500 million 9½% bonds due 2008 and £200 million 10% bonds due 2009 for new euro-denominated bonds due 2012. Both existing bonds were issued through ABB International Finance Ltd.

"This transaction will allow us to further lengthen our debt maturity profile while maintaining our target to reduce gross debt to $4 billion by the end of 2005," said Fred Kindle, ABB chief executive officer-designate, in a news release.

The Zurich, Switzerland, power and automation technology company added that it has also amended its $1 billion credit facility to give it greater flexibility and cut financing costs.

For the euro bonds, ABB is offering the new bonds on a one-for-one basis plus a cash payment in euros.

For the sterling bonds, ABB is offering the new bonds at a ratio of €900 principal amount for each €1,000 equivalent principal amount of the existing bonds plus a cash payment in pounds.

In each case, the cash payment will be set as the difference between the exchange price multiplied by the principal amount tendered and the new issue price of the 2012 bonds multiplied by the principal amount issued.

Pricing on the old euro notes will be based on a spread of 95 basis points over euro mid-swaps. For the sterling notes it will be based on a spread of 110 basis points over sterling mid-swaps.

The new bonds will be issued at a spread of between 120 and 135 basis points over euro mid-swaps.

The new issue spread will be fixed at 3 a.m. ET on Dec. 7. The exchange expires on 11 a.m. ET on Dec. 14. Pricing will be set at 9 a.m. ET on Dec. 15.

The offer is subject to at least €300 million of the new bonds being issued. ABB said it may sell additional new bonds for cash to bring the total to €300 million.

Barclays Capital (+44 207 773 8990), Citigroup (+44 207 986 8969) and Credit Suisse First Boston (+44 207 883 6748) are dealer managers. HSBC and Skandinaviska Enskilda Banken AB are co-dealer managers.

The exchange is not being offered in the United States, Italy or Spain.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.