Outokumpu launches €215 million five-year convertibles at 2.75%-3.75%, up 30%-35%

By Rebecca Melvin

New York, Feb. 18 – Outokumpu Oyj launched a €215 million offering of five-year senior unsecured convertible bonds that was talked to price at par to yield 2.75% to 3.75% with an initial conversion premium of 30% to 35%, according to a news release.

Pricing was expected to be completed by late Wednesday.

There is a coupon step-up by 0.75% if Outokumpu’s secured capital market debt (excluding any existing secured notes) exceeds €250 million.

There is an over-allotment option for up to €35 million of additional bonds for the Regulation S deal that is being sold via bookrunner Credit Agricole CIB.

The bonds are non-callable for three years and then provisionally callable if shares exceed 130% of the conversion price. There is also a takeover put.

Proceeds will be used to refinance Outokumpu’s existing debt and for the redemption of the senior secured notes maturing in 2016.

Following the issue of the convertible bond, Outokumpu is planning to cancel the remaining unused €250 million of its €500 million liquidity facility established in February 2014.

Settlement is expected Feb. 26, and the bonds are expected to be listed on the open market segment of the Frankfurt Stock Exchange.

Based in Espoo, Finland, Outokumpu is a stainless steel company.

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