Vodafone has issued an equity-backed bond, and will use some of the proceeds to buy back cash options held by Morgan Stanley to hedge its exposure to equity resulting from the eventual conversion of the bonds.
Vodafone (LON:VOD) has raised £500m (US$764m) by issuing a non-dilutive equity-linked bond.
Some of the proceeds from the offering will be used to purchase cash-settled call options from Morgan Stanley, and the rest will be used for general corporate purposes.
Vodafone said buying back the cash options would hedge its exposure to equity resulting from the conversion of the bonds.
The notes were issued at par and the coupon was zero.
Morgan Stanley is the sole global coordinator on the offering and a joint bookrunner alongside HSBC.
Vodafone has also completed the issuance of €750m (US$803m) of 2020 notes under its €30bn euro medium term note programme. Joint lead managers on this offering – which will yield 0.960% per annum – were BNP Paribas, Commerzbank and Socié
The British group recently ended talks with Liberty Global about potential asset swaps in Europe and has decided against spinning-off all of its emerging assets into a new business.
However, Vodafone is closely examining an IPO of its Indian business with a view to listing it next year. A final decision is yet to be taken.