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Alcatel offers bonds due 2014 in exchange for 7% notes
New York, March 17 - Alcatel said it has begun its previously announced exchange offer for its €995 million of 7% notes due 2006. The company will be offering new fixed-rate notes due 2014.
The exchange price for the existing notes will be fixed at a margin over the mid-market quote on the 4.50% OBL due Aug. 18, 2006. The margin will be between 145 and 155 basis points with the precise level to be fixed at 7 a.m. ET on March 24.
The issue price and coupon of the new bonds will be based on a spread over the 4.25% Bund due Jan. 4, 2014. The spread will be between 225 and 265 basis points with the precise level to be fixed at 7 a.m. ET on March 24.
The price for the new bonds will be set as close to par as is possible to achieve a coupon that is a multiple of 1/8%.
The exchange ratio will be set as the ratio of the exchange price and the issue price of the new bonds. It will be fixed on March 30.
Holders will also receive accrued interest.
The exchange expires at 9 a.m. ET on March 29, subject to possible extension.
Alcatel may also issue up to an additional €100 million of the new notes. If it does so, it will announce the decision on the pricing date.
Alcatel said it reserves the right to terminate the exchange offer if less than €300 million of the existing notes are tendered although it may waive this condition provided the total principal amount of the new notes and the additional new notes is a minimum of €300 million.
Alcatel, a Paris-based communications equipment company, is carrying out the exchange to extend the maturity of its debt.
The lead dealer managers and structuring agents for the exchange offer are the London offices of BNP Paribas (contact Frédéric Zorzi or Stéphanie Sfakianos at +44 20 7595 8222) and Merrill Lynch International (contact Jeff Tannenbaum or Asar Mashkoor at + 44 20 7995 3966).
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