Nashville, Dec. 9 - RepCon Lux SA sold $1.4 billion of seven-year exchangeable bonds, which convert into ordinary shares of Repsol YPF SA, at par to yield 4.5% with a 31% initial conversion premium via joint bookrunners Merrill Lynch & Co., JPMorgan Securities and UBS Investment Bank.
The issue is guaranteed by Pemex.
The Rule 144A/Regulation S deal, which launched early Tuesday, priced at the cheap end of yield talk of 4.0% to 4.5% but at the more aggressive end of premium guidance of 30% to 35%.
Pemex said the bond is believed to be the first by a Latin American state-owned entity convertible into European stock. According to a Reuters report, the issue would convert into Pemex's entire 4.8% stake in Repsol, but it is not a monetization of the investment as there is a cash settlement option.
Terms of the deal are:
| Issuer: | RepCon Lux SA
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| Guarantor: | Pemex
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| Reference shares: | Repsol YPF SA
|
| Issue: | Exchangeable bonds
|
| Bookrunners: | Merrill Lynch & Co., JPMorgan Securities and UBS Investment Bank
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| Amount: | $1.4 billion
|
| Maturity: | December 2010
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| Coupon: | 4.5%
|
| Price: | Par
|
| Redemption price: | Par
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| Yield: | 4.5%
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| Conversion premium: | 31%
|
| Conversion price: | €19.061
|
| Conversion ratio: | 52.4631
|
| Call: | Non-callable for 4 years, then subject to 130% trigger
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| Expected ratings: | Moody's: Baa1
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| S&P: BBB-
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| Price talk: | 4-4.5%, up 30-35%
|
| Pricing date: | Dec. 9
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| Distribution: | Rule 144A/Regulation S
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