By Rebecca Melvin
New York, June 26 - Arcandor AG priced a downsized €275 million of five-year bonds late Wednesday exchangeable into shares of Thomas Cook Group plc, which will yield 8.875% with an initial conversion premium of 20%, according to a market source.
The issue, which was initially expected to be €300 million in size, priced on the cheap end of talk, which was for a coupon of 7.875% to 8.875% and an initial conversion premium of 20% to 27% above the volume weighed average price.
Joint lead managers and joint bookrunners were ABN Amro, Bayerische Landesbank and Dresdner Kleinwort.
The unsubordinated, unsecured exchangeable bonds have an investor put in year three, and also an issuer call at par after three years, subject to a 130% share price trigger.
The bonds have dividend protection and a change-of-control put at the greater of parity, par and a measure of the bond value that is adjusted by the parity change over the change-of-control event.
Proceeds are expected to be used to enhance financial flexibility for continued growth and for refinancing existing credit facilities owed to a syndicate of banks, including the joint lead managers.
Based in Essen, Germany, Arcandor is a mail order and department store company.
| Issuer: | Arcandor AG
|
| Issue: | Unsecured exchangeable bonds
|
| Underlying shares: | Thomas Cook Group plc
|
| Bookrunners: | ABN Amro, Bayerische Landesbank and Dresdner Kleinwort
|
| Amount: | €275 million, downsized from €300 million
|
| Maturity: | 2013
|
| Coupon: | 8.875%
|
| Price: | Par
|
| Yield: | 8.875%
|
| Conversion premium: | 20%
|
| Price talk: | 7.875%-8.875%, up 20%-27%
|
| Calls: | Non-callable for three years, subject to 130% trigger
|
| Puts: | In year three
|
| Change-of-control put: | Yes
|
| Pricing date: | June 25
|
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