UDPATE: FCC Sets Convertible Bond Conversion Price, Coupon

Spain's Fomento de Construcciones y Contratas SA (FCC.MC) said Thursday it has set a 6.5% coupon and a EUR39.29 a share conversion price for a EUR450 million convertible bond.

In a statement, the construction company said that the bond issue, announced Wednesday, will diversify its financing base and that shareholder dilution will be limited by "FCC's ability to use treasury stock in the bond conversion."

FCC also said it has given joint lead managers Barclays Bank PLC and Societe Generale SA a greenshoe option to issue an additional EUR50 million in bonds to cover extra demand.

In a note to investors, Banesto Bolsa calculated the bond's conversion ratio could require the issue of new shares equal to 8.5% of FCC's existing share capital, though the company could also largely cover this amount with treasury stock and its share buyback plan.

Nonetheless, the brokerage said the bond issue, following two syndicated loans in the last 18 months, shows the company's "recurring need for financing... which is viewed negatively by investors."

At 0745 GMT, FCC shares were trading up EUR0.3, or 1%, at EUR30.95, recovering somewhat after falling 5.1% Wednesday on the bond issue announcement.

Company Web site: www.fcc.es

-By Jonathan House, Dow Jones Newswires; 34 91 395 81 20; [e-mail]