Czech 70% state-owned utility CEZ AS (BAACEZ.PR) announced an
offering of approximately 450 million euro ($612 million)
guaranteed exchangeable bonds for Hungarian oil and gas company MOL
Nyrt. (MOL.BU) in a release on Tuesday.
MAIN FACTS:
- The bonds are exchangeable for ordinary shares of MOL in
between Jan. 25 and July 21, 2017.
- Pricing will be announced on Tuesday and the bonds are
expected to settle on or around Feb. 4.
- CEZ will issue the bonds in EUR100,000 denominations with a
maturity of three years and six months. They are expected to carry
a coupon in the range of 0.00% to 0.50% per annum payable annually
in arrear, subject to a short first coupon, commencing Aug 4,
2014.
- The initial exchange price will be set at a premium of between
30%-35% over the volume weighted average price of the shares on the
Budapest Stock Exchange between launch and pricing of the
bonds.
- The bonds will be issued by CEZ MH B.V., a 100% subsidiary of
CEZ incorporated under the laws of the Netherlands. The issuer's
obligations under the bonds will be guaranteed by CEZ, which is
rated A2 by Moody's and A-minus by Standard & Poor's. The bonds
have received a preliminary rating of A2 by Moody's and are
expected to be rated A-minus by Standard & Poor's.
- CEZ will have the option to redeem the bonds on or after Feb.
24, 2017 at their principal amount together with accrued but unpaid
interest, if the value of the shares deliverable upon exchange of
the bonds exceeds 130% of the principal amount of the bonds for a
specified period, in accordance with the terms and conditions.
- CEZ retains the right to redeem the bonds before Feb. 24, 2017
at the greater of either the principal amount of the bonds, or the
fair bond value, or the parity value, together with accrued
interest or on or after Feb. 24, 2017 at the principal amount of
the bonds together with accrued interest, if CEZ is required to
gross up on account of taxes or if 85% or more in principal amount
of the bonds have been redeemed, exchanged or purchased and
canceled.
- CEZ will also have the right to redeem the bonds at any time,
at the greater of either the principal amount of the bonds, or the
fair bond value or the parity value if a tender offer is made in
respect of the shares.
- The offering is managed by Barclays Bank PLC and Deutsche Bank
AG, London Branch acting as Joint Global Coordinators and Joint
Bookrunners, and HSBC Bank plc and Societe Generale Corporate &
Investment Banking acting as Joint Bookrunners.
- CEZ was trading down 0.1% or CZK12.42 at CZK514.10 at 10:40
GMT and MOL was trading down 0.5% or HUF70 at HUF13,760.
Write to the Budapest bureau at budapest@dowjones.com
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