New Issue: BMW sells €560 million, exchangeable into Rolls-Royce, at 1.875%, up 37.7%

By Ronda Fears

Nashville, Dec. 4 - BMW AG sold €560 million of five-year exchangeable bonds at par to yield 1.875% with a 37.7% initial conversion premium via joint bookrunners Morgan Stanley and Citigroup.

The bonds convert into shares of Rolls-Royce Group plc.

The deal sold roughly at the middle of price talk of 1.625% to 2.125%, up 35% to 40%.

Terms of the convertible offering are:

Issuer:	BMW AG
Reference shares:	Rolls-Royce Group plc
Issue:	Exchangeable bonds
Joint bookrunners:	Morgan Stanley and Citigroup
Amount:	€560 million
Maturity:	December 2008
Coupon:	1.875%
Price:	Par
Redemption price:	Par
Yield:	1.875%
Conversion premium:	37.7%
Conversion price:	€2.46
Conversion ratio:	406.5041
Call:	Non-callable for 3 years, then with 130% hurdle
Price talk:	1.625-2.125%, up 35-40%
Pricing date:	Dec. 4

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