Vodafone breaks CB mould but £2.9bn is tough sale

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By Jon Hay
18 Feb 2016

The extraordinary versatility of convertible bonds — but also the market’s unpredictability — were highlighted on Thursday when Vodafone launched an unprecedented £2.88bn bond designed to achieve the near impossible: debt-like funding that counts as equity but is not dilutive to shareholders, writes Jon Hay.

The bond, variously described by equity-linked bankers away from the deal as “a cool trade” and “a near-perfect trade from the perspective of the banks’ risk”, involved an option package provided by the bookrunners, JP Morgan and Morgan Stanley.

The transaction, equivalent to $4.1bn, was designed to free ...

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