Cellnex EUR 500m 2026 CB book covered around 09:20 GMT
Cellnex Telecom’s [BME:CLNX] EUR 500m offering of senior unsecured convertible bonds (CBs) has been covered, a source close to the deal told this news service.
A message was sent out to the market at 09:20 GMT, the source said, adding that the book is still open, and that further price guidance will follow.
The 8-year maturity bonds are offered with a coupon range of 1.25% to 2.00% and a conversion premium of 70%. The offering is the first equity-linked paper from the Spanish telecoms group, which is 34% owned by Abertis [BME:ABE]. Cellnex, which will use the proceeds for general corporate purposes, is tapping the CB market thanks to favourable market conditions and to diversify its funding sources, it said in the offer announcement.
Abertis is itself subject to a takeover tussle between Italian group Atlantia [BIT:ATL] and German Hochtief [FRA:HOT] (in turn owned by Spain’s ACS [BME:ACS]). Under Spanish law, a change of control of Abertis’ 34% stake in Cellnex would require a mandatory waterfall bid. But both Atlantia and Hochtief have said they would sell Cellnex shares below the 30% threshold rather than launch a bid.
The CB offer looks “a bit heavy” given the high premium, but the fat coupon and the issuer’s near-investment grade rating still give a nice polish, a buysider said. Overall, the offer looks more attractive than Michelin’s [EPA:ML] issue last week, he said, noting that the Cellnex paper was trading around issue price + 0.5 in the grey this morning.
Cellnex is rated BB+ stable by Standard & Poor’s and BBB- stable by Fitch.
Terms of the offer look fair overall, though the long-dated structure with a high coupon and exchange premium is unusual and might not appeal to all investor types, a convertibles analyst argued. Outrights could form the backbone of demand, especially as the benchmark-sized deal should enter main indexes, he suggested.
BNP Paribas, Goldman Sachs and Morgan Stanley are the bookrunners.
Leads are going with 195 basis points credit and implied volatility of 21%, Monis convertible bond specialist Will Weichhart noted. Based on the leads’ implied vol assumption, the valuation from worst-to-best coupon would be 96.4-101.5/8, he said. The bond floor would be 90-95.5 and delta 34-35, he added.
A Cellnex spokesperson was not available for comment.