Maturity: 13 March 2013
Issue/re-offer price: 99.873
Coupon: three month Euribor plus 40bp
Spread at re-offer: three month Euribor plus 42bp
Launch date: Monday 13 March
Payment date: 17 March
Joint books: Citigroup, Lehman Brothers
This was a great result, and one that the company is proud of having achieved. They had a $1.4bn convertible that will mature this year, and this deal, along with another convertible that the company issued a couple of weeks ago, is being used to refinance that transaction.
The company has been active in the convertible market in the past, but this is their debut issue in this sector.
We went on a roadshow between Monday and Thursday last week, and during that marketing the management of the company did a great job explaining the credit and the sector at large — the semi-conductor market sees very little issuance. The education process for investors was necessary, and the feedback we got was that the company did a tremendous job on the road.
The group is the fifth biggest semi-conductor group in the world, but there are few comparable bonds in the market.
The company was certain that it wanted to do a Eu500m seven year deal, but it had no fixed aspirations about whether the deal should be fixed or floating rate.
Given the number of fixed rate trades in the five to 10 year market last week, and the hike in interest rates from the ECB, investors were increasingly keen on a floating rate trade — we had a few lead orders and reverse enquiries.
On Monday morning we went to the market with guidance of 42bp-45bp over Euribor, at that time we had around Eu300m of interest from lead orders, and by 3pm that day the book stood at Eu650m. The books closed at 4.30pm comfortably oversubscribed. That allowed us to price it at 42bp. It is now trading at re-offer.
The wide distribution of the deal was pleasing: 34% went to Italy, Iberian investors took 20%, 12% was bought in the UK, Asian buyers took 11%, with a further 10% going to Germany. French and Benelux buyers took 10% with 3% going to Greece.