London, Jan 25 (IFR) - Belgian industrial holding company
Groupe Bruxelles Lambert has priced its EUR1bn exchangeable bond
into French electric and gas concern GDF Suez, after withdrawing
an earlier offer on Thursday when investors rejected the terms.
The revised deal priced after closing on Thursday with a
1.25% coupon, just 25bp wider than the original guidance and
with a premium of 20%.
Despite the relatively minor change to the pricing terms,
structural revisions were also made to make the bonds from GBL
more attractive to investors.
Under the original terms at launch on Thursday morning, the
bonds, representing 2.3% of GDF Suez, would convert into GDF
shares at a 20%-25% premium and pay a coupon of 0.375%-1.000%.
Within hours, lack of momentum and orders forced syndicate
bankers, GBL and its adviser Rothschild to reconsider and revise
The structural changes were a reaction to investor
complaints that the exchangeables were too bond-like and offered
very little exposure to the equity. The equity option
represented just 2.5% of the value of the bonds on the launch
In addition to the coupon increase, an investor put was
added at three years, which gives investors the option to demand
the bonds are repaid early.
The original call option at two years - provided the shares
surpassed a 125% trigger on the eventual reference price -
increased to a call at three years with a 130% trigger.
"This market changes a lot and we need to be humble about
where investors are at any one time," said a banker on the deal.
The exchange price on the bonds is EUR18.32. GDF Suez shares
are up slightly on Friday at EUR15.26.
On demand, the geographic split was 48% for UK accounts and
32% for French accounts. On allocation, the book comprised
approximately 55% hedge funds and 45% outrights.
(Reporting by Robert Venes; Editing by Owen Wild)