FRANKFURT, June 4 (Reuters) - German public-sector trust RAG foundation is reducing its stake in Evonik with an exchangeable bond that carries a zero percent coupon, a source familiar with the transaction said.
The exchange price of the bond is being set at a 37.5 percent premium above the volume weighted average price, the source said on Wednesday.
RAG earlier said that it would issue a bond worth as much as 600 million euros ($680 million) that can be exchanged into about 3 percent of Evonik's share capital.
It had published a target range for the coupon of 0-0.5 percent and a range of 30-37.5 percent for the premium over the exchange price. (Reporting by Arno Schuetze; Editing by Thomas Atkins and Ludwig Burger)