Chicago, Sept. 20 – Bayer AG (Baa2/BBB/BBB+) priced a €1.75 billion dual-tranche subordinated resettable fixed-rate notes offering with both parts due in 2083 (Ba1/BB+/BBB-), according to a market source regarding the deal which priced on Wednesday.
The deal includes €750 million of 6 5/8% notes with a first optional redemption date in 2028. The rate will start to reset on Dec. 25, 2028 to mid-swaps plus 343.2 basis points at five-year intervals. There is a rate step-up of 25 bps from December 2033 and then an additional 75 bps from December 2048. The notes priced at 99.502 to yield 6¾%. Price talk had the notes coming significantly higher, in the 7 3/8% area.
The larger tranche, for €1 billion, comes with call protection through 2031. The initial 7% coupon will reset to mid-swaps plus 389.6 bps starting Dec. 25, 2031 and then at five-year intervals. A 25 bps step-up will be in place from December 2036 and then there will be an additional 75 bps step-up from December 2051. The second tranche priced at 99.284 to yield 7 1/8%. Talk on the second tranche was also much higher, in the 7 7/8% area.
Goldman Sachs Bank Europe SE (billing and delivery), BNP Paribas, Credit Agricole CIB and MUFG were the active joint bookrunners for the Regulation S offering.
Passive bookrunners were Barclays, JPMorgan, Mizuho and SMBC.
Proceeds will be used for general corporate purposes, including to partially refinance the existing €1.5 billion of subordinated resettable fixed-rate notes due 2074 callable on July 1, 2024 and the €1 billion subordinated resettable fixed-rate notes due 2079 that are callable on Feb. 12, 2025.
The deal was massively oversubscribed. Remarkably, there was more than double the interest in the tranche with more call protection. The final order book for the second tranche was over €5.9 billion, a source noted. The order book on the first tranche was above €2.7 billion.
The notes will be listed in Luxembourg.
The health care and agriculture products company is based in Leverkusen, Germany.
| Issuer: | Bayer AG
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| Amount: | €1.75 billion
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| Issue: | Subordinated resettable fixed-rate notes
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| Maturity: | Sept. 25, 2083
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| Bookrunners: | Goldman Sachs Bank Europe SE (billing and delivery), BNP Paribas, Credit Agricole CIB, MUFG, Barclays, JPMorgan, Mizuho and SMBC
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| Trade date: | Sept. 20
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| Settlement date: | Sept. 25
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| Ratings: | Moody’s: Ba1
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| S&P: BB+
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| Fitch: BBB-
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| Distribution: | Regulation S
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| Marketing: | Investor calls
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| Tranche 1
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| Amount: | €750 million
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| Coupon: | 6 5/8% initial rate; resets to mid-swaps plus 343.2 bps starting Dec. 25, 2028 at five-year intervals; rate steps up with additional 25 bps from December 2033; additional 75 bps step-up from December 2048
|
| Price: | 99.502
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| Yield: | 6¾%
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| Spread: | Bunds plus 405.4 bps
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| Call features: | Par call from Sept. 25, 2028 to Dec. 25, 2028; par call on any interest payment date thereafter
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| Price talk: | 7 3/8% area
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| ISIN: | XS2684826014
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| Tranche 2
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| Amount: | €1 billion
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| Coupon: | 7% initial rate; resets to mid-swaps plus 389.6 bps starting Dec. 25, 2031 at five-year intervals; rate steps up with additional 25 bps from December 2036; additional 75 bps step-up from December 2051
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| Price: | 99.284
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| Yield: | 7 1/8%
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| Spread: | Bunds plus 450 bps
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| Call features: | Par call from Sept. 25, 2031 to Dec. 25, 2031; par call on any interest payment date thereafter
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| Price talk: | 7 7/8% area
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| ISIN: | XS2684846806
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