* ACS issues 5-year bond against Iberdrola shares
* 405.6 million-euro issue follows similar deals in Spain
* Move allows ACS to cut Iberdrola stake
(Adds conversion price, annual interest, details)
MADRID, March 13 Spanish builder ACS
said on Thursday it planned to issue a five-year bond of 405.6
million euros ($564 million) that could be exchanged for shares
of Iberdrola, in a move that allows it to reduce its
stake in the power utility.
ACS issued 721 million euros of similar bonds last October.
The group, which has been selling assets to cut debt, had 14.85
percent of Iberdrola in 2013 and its stake now stands at around
Other companies in Spain, where many banks and industrial
groups have cross-holdings, have also stepped up issues of
exchangeable bonds in recent months as a source of funding and
to partly unwind such stakes.
Lender Caixabank last year issued bonds that could
be exchanged for part of its stake in oil group Repsol
in a deal that helped boost its capital position.
ACS said in a statement to Madrid's stock market regulator
on Thursday that the new bonds would be exchangeable for around
63 million Iberdrola shares, equivalent to just under 1 percent
of the utility's capital.
The conversion price was set at 6.419 euros, representing a
premium of nearly a third over the average price of the shares
between when the issue was announced earlier on Thursday and
when the price was fixed.
ACS said the bonds would carry annual interest of 1.625
percent, and that it could choose to hand over cash, Iberdrola
shares or a combination of the two to bondholders.
The bondholders have a call option in March 2017, meaning
they could ask to exchange the bonds for Iberdrola shares in
three years' time.
ACS added that the proceeds of the issue would go towards
refinancing existing debt and financing operations.
Iberdrola shares have gained 7.12 percent so far this year
and are up 18.85 percent over the past 12 months.
BBVA, Credit Agricole, Royal Bank of Scotland and Unicredit
are joint bookrunners on the deal, ACS said.
ACS shares were trading up 0.21 percent near the market
close, while Iberdrola shares were down 0.97 percent at 4.787
Separately on Thursday, German builder Hochtief, which
counts ACS as its biggest shareholder, installed its chief
executive at the helm of majority-owned Leighton Holdings Ltd
Hochtief also marginally sweetened a bid to increase its
stake in Australia's biggest builder to about 74 percent from
just under 59 percent currently, as it seeks to push through a
restructuring of the firm.
($1 = 0.7192 euros)
(Reporting by Sarah White and Tracy Rucinski; Editing by Paul
Day and Pravin Char)