Equity-neutral convertibles return as Michelin bags juicy arbitrage

Bibendum Michelin London Poster 1925 PA 230x150
By Jon Hay
05 Jan 2017

The equity-neutral convertible bond structure that faded from the market in the second half of 2016 made a strong comeback on Thursday, when French tyre maker Michelin launched a $500m deal that won eager demand and was priced at the best end of terms for the issuer, writes Jon Hay.

Michelin followed the example of LVMH, the French luxury goods maker, and car parts maker Valeo, which last year brought equity-neutral deals in dollars, to pick up extra arbitrage from swapping the proceeds to euros.

Crédit Agricole was global co-ordinator, with JP Morgan and Société Générale bookrunners. Some ...

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