Chicago, Aug. 29 – Volkswagen International Finance NV priced €1.75 billion of green subordinated hybrid notes (Baa2/BBB-) on Tuesday, according to a market source.
The deal priced as two perpetual notes that come either with five years of call protection or nine years of call protection.
The first €1 billion tranche with five years of call protection priced at par to yield 7.5%, or at mid-swaps plus 429.2 basis points. Initial talk was in the 7.875% yield area.
The second tranche with nine years of call protection priced as €750 million of notes, at par to yield 7.875%. The spread was 478.3 bps to mid-swaps. Initial talk was in the 8.375% to 8.5% yield area.
The interest rates will reset on the first call dates and then either every five years thereafter or nine years thereafter.
Interest for both notes will step up 25 bps on Sept. 6, 2022 and then a further 75 bps on Sept. 6, 2048 for the first tranche and a further 75 bps on Sept. 6, 2052 for the second tranche.
BNP Paribas handled billing and delivery for the Regulation S offering. Other bookrunners were Citigroup, Commerzbank, Mizuho and Santander.
Proceeds will be used for an eligible green portfolio.
Listing will be in Luxembourg.
Even though allocations were lighter on the second tranche, demand was stronger. The order book was over €3.2 billion on the first tranche and over €4.5 billion on the second tranche when price talk tightened late in the morning in Europe.
The financing arm of Volkswagen is based in Amsterdam. Volkswagen AG, a German automotive manufacturer, is based in Wolfsburg, Germany.
The notes are guaranteed by the parent.
| Issuer: | Volkswagen International Finance NV
|
| Guarantor: | Volkswagen AG
|
| Amount: | €1.75 billion
|
| Issue: | Green subordinated hybrid notes
|
| Bookrunners: | BNP Paribas (billing and delivery), Citigroup, Commerzbank, Mizuho and Santander
|
| Trade date: | Aug. 29
|
| Settlement date: | Sept. 6
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB-
|
| Distribution: | Regulation S
|
|
|
| No-call five
|
| Amount: | €1 billion
|
| Maturity: | Perpetual
|
| Coupon: | 7.5% initial rate, resets for first time on Sept. 6, 2028 to mid-swap rate plus margin with 25 bps step-up on Sept. 6, 2033 and further 75 bps step-up on Sept. 6, 2048
|
| Price: | Par
|
| Yield: | 7.5%
|
| Spread: | Mid-swaps plus 492.2 bps
|
| Call features: | First call date on Sept. 6, 2028 and then each interest payment date thereafter
|
| Price talk: | 7.875% yield area
|
| ISIN: | XS2675884576
|
|
|
| No-call nine
|
| Amount: | €750 million
|
| Maturity: | Perpetual
|
| Coupon: | 7.875% initial rate, resets for first time on Sept. 6, 2030 to mid-swap rate plus margin with 25 bps step-up on Sept. 6, 2033 and further r75 bps step-up on Sept. 6, 2052
|
| Price: | Par
|
| Yield: | 7.875%
|
| Spread: | Mid-swaps plus 478.3 bps
|
| Call features: | First call date on Sept. 6, 2032 and then each interest payment date thereafter
|
| Price talk: | 8.375% to 8.5% yield area
|
| ISIN: | XS2675884733
|
|
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