Vodafone launches £2.9bn convertible bond issue

 
Emma Haslett
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Vodafone Cuts Year Loss to 5bn GBP
Vodafone announced a merger with Dutch firm Liberty this week (Source: Getty)

Fresh from its merger with Dutch telecoms giant Liberty, Vodafone has unveiled plans to raise £2.9bn through mandatory convertible bonds.

In a statement this morning, the company said it will issue its bonds in two tranches - one with a maturity of 18 months, another with a three-year maturity. Their returns are expected to be between 1.2 per cent and 1.5 per cent for the 18-month note, and 1.7 per cent to two per cent for the three-year note.

The company added the bonds will be convertible to around five per cent of its shares. "Vodafone will be entitled to satisfy this delivery obligation by allotting and issuing new ordinary shares... or by transferring existing ordinary shares from treasury," it said.

The initial Conversion Price will be determined on the basis of the higher of (i) GBP2.1730 (being Vodafone's closing share price on the London Stock Exchange (the "LSE") on Wednesday, 17 February 2016, the "initial Share Price") and (ii) the arithmetic average of the daily volume-weighted average prices of an Ordinary Share on the LSE over a period of three consecutive scheduled trading days starting on 19 February 2016

The price will be announced on 23 February.

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