Vodafone mando restarts non-dilutive equity race

By Aidan Gregory, Jon Hay
07 Mar 2019

Vodafone’s £3.4bn mandatorily convertible bond with share buyback language, sold to huge demand this week, may have created a new financial product. Certainly it will set off a maelstrom of analysis and pitching to clients, as banks seek other companies willing to try this daring structure. Jon Hay and Aidan Gregory report.

The essence of the deal — a structure Vodafone has issued before, with a £2.9bn deal in 2016 — is to be a hybrid capital instrument: debt that is treated as equity. Mandatorily convertible bonds, which must be redeemed with shares, are treated under accounting rules as 100% ...

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