STRUCTURED EQUITY: Nexans returns with rare short seven-year

The new year revival of the European equity-linked market continued this morning with the issue of €240m in new January 2019 convertible bonds by French cable maker Nexans. The book has already closed on the issue, led by joint bookrunners HSBC and Societe Generale, and pricing and allocations are due later this afternoon.

The leads pre-sounded some key accounts yesterday as it is the first new issue in France this year.

Concurrently the company is buying back its 2013 convertibles, which total €280m. The new issue is to refinance and term out company debt. This also explains the near seven-year tenor – a rarity in France – which fits in with the maturity profile of other outstanding debt. In order to sweeten investors on the deal there is a put a little earlier on June 1 2018. The last French issue with a similar tenor was by Vilmorin in May 2008.

Bonds are offered with a 2.5%–3.0% coupon and 30%–35% premium over the VWAP during bookbuilding. The company has a BB+ rating from S&P. The base issue totals €240m but could reach €275m with full exercise of the greenshoe. Leads have only until February 27 to exercise the greenshoe, ahead of the actual February 29 issue date.

Major shareholders Madeco Group (19.86%) and FSI (5.64%) are not participating in the deal.

Nexans shares were down 2.33% to €53.25 at 12:45 CET.