Chicago, May 24 – Vodafone Group plc priced a hybrid bond offering of deeply subordinated obligations (Ba1/BB+/BB+) on Wednesday, according to a source.
The first tranche is sized at €750 million with a 61.25-year tenor and 6.25 years of call protection. The 6½% initial interest rate resets for the first time on Aug. 30, 2029 to the five-year mid-swap rate plus an initial margin and then there are two additional step-ups, 25 bps on Aug. 30, 2034 and another 75 bps on Aug. 30, 2049.
The bonds priced at 99.415 to yield 6 5/8%. Initial price talk was in the 6 7/8% area for yield. The initial credit spread priced as mid-swaps plus 348.9 bps.
The second tranche is sized at £500 million with a 63.25-year tenor and 8.25 years of call protection. The initial 8% interest rate resets for the first time on Aug. 30, 2031 and then each five years thereafter. The rate resets to the five-year Gilt rate plus the initial margin and is subject to a 25 bps step-up on Aug. 30, 2036 and then another 75 bps step-up on Aug. 30, 2051.
The bonds priced at 99.326 to yield 8 1/8%. Talk on the yield was in the 8 3/8% area. The initial credit spread was 383.7 bps above Gilts.
There is a make-whole call option available to the issuer at any time except during par call periods. The premium is Bunds plus 50 bps for the euro notes and Gilts plus 50 bps for the sterling notes. There are three-month par call options three months before the reset dates.
Final books for the two tranches were €1.7 billion and £1.05 billion-plus, respectively.
The joint bookrunners for the first tranche were BNP Paribas, BofA, Goldman Sachs International and MUFG.
The joint bookrunners for the second tranche were BofA, NatWest Markets and RBC Capital Markets.
BofA is handling billing and delivery for both parts.
Proceeds will be used for general corporate purposes, including to refinance debt which may include the repurchase via tender offer of Vodafone Group’s €2 billion 3.1% capital securities with a first call date on Oct. 3, 2023 and the $1.3 billion 6.25% capital securities with a first call date on July 3, 2024.
Listing will be in London.
The telecommunications company is based in London.
| Issuer: | Vodafone Group plc
|
| Amount: | €750 million, £500 million
|
| Issue: | Hybrid bonds
|
| Change of control: | At 101 or step-up by 500 bps if not redeemed
|
| Trade date: | May 24
|
| Settlement date: | May 30
|
| Ratings: | Moody’s: Ba1
|
| S&P: BB+
|
| Fitch: BB+
|
| Distribution: | Regulation S
|
|
|
| Tranche 1
|
| Amount: | €750 million
|
| Maturity: | Aug. 30, 2084
|
| Bookrunners: | BNP Paribas, BofA (billing and delivery), Goldman Sachs International and MUFG
|
| Coupon: | 6½% initial rate, resets for first time on Aug. 30, 2029 and on five-year anniversaries thereafter at five-year mid-swap rate and initial margin; 25 bps step-up on Aug. 30, 2034; 75 bps step-up on Aug. 30, 2049
|
| Price: | 99.415
|
| Yield: | 6 5/8%
|
| Spread: | Mid-swaps plus 348.9 bps
|
| Call features: | Make-whole call at Bunds plus 50 bps when par call unavailable; par call three months before each reset date
|
| Price talk: | 6 7/8% area yield
|
| ISIN: | XS2630490717
|
|
|
| Tranche 2
|
| Amount: | £500 million
|
| Maturity: | Aug. 30, 2086
|
| Bookrunners: | BofA (billing and delivery), NatWest Markets and RBC Capital Markets
|
| Coupon: | 8% initial rate, resets for first time on Aug. 30, 2031 and on five-year anniversaries thereafter at five-year Gilt rate and initial margin; 25 bps step-up on Aug. 30, 2036; 75 bps step-up on Aug. 30, 2051
|
| Price: | 99.326
|
| Yield: | 8 1/8%
|
| Spread: | Gilts plus 383.7 bps
|
| Call features: | Make-whole call at Gilts plus 50 bps when par call unavailable; par call three months before each reset date
|
| Price talk: | 8 3/8% area yield
|
| ISIN: | XS2630493570
|
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