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(Adds details on bond, background)
PRAGUE, Jan 28 (Reuters) - Czech utility CEZ announced on Tuesday an offering of around 450 million euros ($615 million) worth of guaranteed bonds due in 2017 and exchangeable for shares in Hungarian oil and gas group MOL .
CEZ owns a 7 percent stake in MOL after the Hungarian group's option to buy the shares expired last week. The shareholding dates back to a 2007 tie-up with MOL to build gas-fired power plants, whose plans have since been shelved.
CEZ had said on Monday it was analysing options on what to do with the 7.68 million shares, including a bond.
The bond issue confirms what a market source with close knowledge of CEZ told Reuters last week - that the company was looking at a plan to hold the MOL shares for the next three years via a convertible bond.
The bond will have a maturity of 3-1/2 years and should carry a coupon of 0.00 to 0.50 percent.
Bondholders will have the right to exchange the bonds for shares starting on Jan. 25, 2017. CEZ will also have the right to redeem the bonds from February 2017 at their principal amount if the value of the shares exceeds 130 percent of the principal for a specific period.
Shares in MOL traded a touch higher on Tuesday at 13,850 forints, far below the strike price on MOL's expired option which CEZ has said was 20,000 forints.
CEZ shares gained 0.8 percent to 518.50 crowns.
Majority state-owned CEZ has said the expiration of the option would not affect its earnings because it has been re-evaluating the deal regularly.
$1 = 0.7313 euros Reporting by Robert Muller; Editing by Jason Hovet and Mark Potter