Swiss Confederation to sell CHF1.5 billion bonds exchangeable into Swisscom, to yield 0.25%, up 26.58%

By Ronda Fears

Nashville, Dec. 8 - The Swiss Confederation launched CHF1.5 billion of exchangeable bonds, which convert into Swisscom A.G. Ltd. shares, to yield 0.25% with a 26.58% initial conversion premium.

UBS Investment Bank and JPMorgan Securities are joint bookrunners of the deal, which was scheduled to price Monday.

The four-year bonds will be non-callable for two years with a put in year two.

The bonds will be issued at par and redeemed at par.

The issue is part of the privatization of Swisscom.

Deutsche Bank Securities analysts put the issue 1% rich, using a credit spread of zero basis points over Libor and a 15% stock volatility and noting a 4.03% common dividend yield on Swisscom shares.

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