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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Telekom Austria AG (PK) | USOTC:TKAGY | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.275 | 14.28 | 18.58 | 0.00 | 01:00:00 |
By Art Patnaude
Electricite de France SA (EDF.FR) Tuesday was selling a type of high-yielding debt that has been gaining traction with both issuers looking to protect their credit ratings and investors clambering for better returns amid pervading low-interest rates.
The French utility was set to sell the equivalent of 4 billion euros ($5.3 billion) of hybrid bonds in euros and sterling, with the deal expected to be completed later Tuesday.
Hybrid corporate bonds combine aspects of both debt and equity. They strengthen a company's balance sheet and can be used to support its credit rating. However, presented with higher risks than more typical corporate bonds, investors are rewarded with a better return.
The EUR1.25 billion, seven-year hybrid bond will price with a yield of 4.375%. The EUR1.25 billion, 12-year debt will yield 5.5%.
The GBP1.25 billion, 13-year tranche will yield 6.125%.
Demand was strong, with order books on all three bonds totalling around EUR13.8 billion, according to a banker working on the deal.
Details on an EDF hybrid bond denominated in dollars are expected this week.
Hybrid bonds are not a common type of bond for companies to sell. However, issuance this year started off strong.
The French waste and water management company Veolia Environment (VE) sold EUR1 billion and GBP400 million of hybrids earlier this month. Telekom Austria (TKA.VI) has met investors about a possible deal, and management at Royal KPN NV (KPN.AE) have said they were looking into hybrids.
Hybrids have a rating and cost benefit for the issuer: a ratings company will count some of the hybrid debt as equity, which may help support a company's credit rating, while the cost will be cheaper than equity financing.
EDF is rated Aa3 by Moody's Investors Service, and A+ by Standard & Poor's and Fitch Ratings.
HSBC, Citigroup and BNP Paribas were lead managers on the deal.
Write to Art Patnaude at art.patnaude@dowjones.com
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