Finnish equipment maker Nokia has decided to immediately draw down €1.5bn of financing from Microsoft to refinance a €1.2bn bridge loan package issued for the acquisition of NSN from JV partner Siemens.
The convertible notes, which mature between…
Finnish equipment maker Nokia has decided to immediately draw down €1.5bn of financing from Microsoft to refinance a €1.2bn bridge loan package issued for the acquisition of NSN from JV partner Siemens.
The convertible notes, which mature between 2018 and 2020, are part of Microsoft’s recent offer to acquire Nokia’s handset business for €5.44bn.
Nokia will issue three tranches of senior unsecured convertible bonds with a nominal value of €500m each.
The first tranche, maturing in 2018, comes with a 1.125% coupon payable semi-annually with an initial conversion price of €3.9338.
The second tranche matures in 2019, pays a 2.5% coupon semi-annually and its initial conversion price is €4.0851.
The third and final tranche matures after 7 years, in 2020, and pays a 3.625% semi-annual coupon. The initial conversion price was set at €4.2364.
The bonds, issued at par, will be redeemed at par at the closing of the sale of Nokia’s handset unit to Microsoft. The Software giant has committed to not sell or convert any of the bonds prior to completion of the sale.
If the transaction should fall apart, the bonds would be redeemed at par on their respective maturity dates. In this case Microsoft would also be entitled to sell the 2018 bonds. But the company has committed to keep the 2019 bonds for at least two years, and the 2020 bonds for three years.
