January 24, 2013 / 2:36 PM / 5 years ago

Belgium's GBL withdraws bond offer as investors baulk

LONDON, Jan 24 (IFR) - Belgium’s Groupe Bruxelles Lambert was forced to withdraw its EUR1bn bond offering on Thursday after investors baulked at terms they considered too expensive.

GBL, the holding company which has stakes in French electric/gas utility GDF Suez and drinks giant Pernod Ricard among others, was to come out with a revised offer later in the day.

The group had been looking to raise EUR1bn with bonds that would convert into GDF shares at a 20%-25% premium and pay a coupon of 0.375%-1.000%.

But analyst valuations of the deal indicated it would be a hard sell. Barclays valued the bonds, which were offered at 100, at 96.4-99.4.

GBL, controlled by billionaire Albert Frere, went ahead with the offer on Thursday morning even though bankers had expressed concerns that the terms were too aggressive.

Convertible and exchangeable bonds - debt issuance that investors can convert into shares of a company - have increasingly come into favour in Europe in the past six months.

GBL itself raised EUR400m in exchangeable bonds in September 2012, and banks working on the latest deal said there should be no trouble selling the new EUR1bn of debt.

The group is using one-third of its 6.9% stake in GDF Suez for the bonds, though this number may now have to increase. The bonds have a maturity of four years.

BNP Paribas Fortis, Deutsche Bank, Societe Generale and UBS are joint bookrunners for the deal, while Rothschild is advising GBL. (Reporting by Robert Venes; Editing by Owen Wild and Marc Carnegie)

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