Priceline US$1bn CB turns red for banks

摘要

In a seemingly perverse game of musical chairs, online travel site operator Priceline Group has cinched US$1bn at the most favourable terms possible in the form of a seven-year convertible bond issue. The question is whether the banks that found a seat - Wells Fargo and Citigroup - were able to extract a profit on the trade. The answer is no, at least not yet. Specifics of the transaction saw the banks finalise pricing at a 0.90% coupon and a 60% conversion premium, and a 99 reoffer discount to enhance economics for investors. The pricing came at the wide-end of talk - 0.75%-0.90% and 60% (fixed) - and implied breakeven economics to backstopped terms agreed to by Wells Fargo and Citigroup.