|
First exchangeable bond in central and eastern Europe issued by EBRD; exchangeable into shares of Hungarian telecoms company MATAV
A groundbreaking US$ 100 million (ECU 91 million) bond exchangeable into shares of MATAV, the Hungarian telecommunications company, was launched today by the European Bank for Reconstruction and Development (EBRD). This is the first supranational exchangeable bond issue and the first transaction of its kind for the EBRD. The EBRD is a triple-A rated issuer and this transaction forms part of the Bank's 1998 borrowing programme.
"As the first exchangeable bond in central and eastern Europe, this bellwether issue will attract a new investor group to MATAV and to Hungary," said Steven Kaempfer, EBRD's Vice President, Finance. "With today's issue, we also aim to set a benchmark for the development of the convertible bond market in central and eastern Europe. This transaction demonstrates the EBRD's commitment to stimulate and encourage the development of new capital market instruments and to bring in new investors to the region."
With a tenor of three years, this bond issue is non-exchangeable for the first 12 months and non-callable for 18 months, and is thereafter callable at par subject to a 130 per cent hurdle being achieved. The issue is lead managed by Morgan Stanley Dean Witter, with Credit Suisse First Boston as co-lead manager.
Peter Reiniger, EBRD Team Leader for Telecommunications and Hungary, said: "The EBRD made an equity investment in MATAV in 1993 to facilitate its privatisation and to enable the company to continue funding its investment programme. MATAV was privatised in 1993, and successfully floated on the New York and Budapest Stock Exchanges last year. Based on the successful privatisation and subsequent development of MATAV, involving the rapid growth of installed lines and the provision of high-quality telecommunications services, both consumer and investor confidence has increased even further, enabling us to launch this exchangeable bond issue."
In addition to the US$ 57 million (ECU 52 million) equity investment in 1993, the Bank has also granted debt financing to MATAV to fund its capital expenditure programmes, in the form of a DM 185 million (ECU 94 million) sovereign loan in 1992 and a US$ 50 million (ECU 45 million) senior debt in 1995, the latter being part of a US$ 300 million (ECU 271 million) syndicated loan facility. Both loans were prepaid in full.
|
