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Michelin sets conversion price of $600 million 0% five-year bonds
By Susanna Moon
Chicago, Jan. 19 – Michelin said it set the initial conversion price at €167.4083 for its zero-coupon five-year cash-settled convertible bonds.
The initial conversion price represents a premium of 30% over the share reference price for the Michelin share of €128.7756, according to a company release on Friday.
The exercise price was set at €164,982.4706, and the initial conversion ratio is 985.5095 per $200,000 principal amount.
The reference foreign exchange rate was 1.21225.
The conversion premium was set using the 10-day average daily volume-weighted average price of the shares in euros on the Euronext Paris exchange for the period beginning Jan. 8.
As reported, Michelin priced an upsized $600 million of the convertibles on Jan. 5 at a price of 95.5 and a yield of 0.79%. The dollar-denominated debt was immediately converted into euros.
The deal came at the cheap end of talk for an initial issue price of 95.5 to 100 and a yield of 0% to 0.79%, as previously noted.
Michelin exercised the $100 million increase option on the originally announced amount of $500 million.
The convertible bonds due Nov. 10, 2023 will carry a coupon of 0% and a conversion premium of 30%.
Societe General CIB was the global coordinator and lead bookrunner for the deal. BNP Paribas, HSBC and JPMorgan were the joint bookrunners.
The bonds will be issued in $200,000 denominations. The conversion ratio will be the value of the bonds converted into euros and divided into the initial conversion price.
Proceeds from the deal will be used for general corporate purposes and the purchase of cash-settled call options, according to a company release.
The bonds will be traded on the open market of Euronext Paris.
Michelin is a Clermont-Ferrand, France-based tire manufacturing company.
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