Air France-KLM talks €480 million convertible Oceanes at minus 0.02% to 0.73%, up 30%-35%

By Rebecca Melvin

New York, March 20 - Air France-KLM Group launched an offering of about €480 million of 10-year convertible Oceane bonds that were talked at a coupon of minus 0.02% to 0.73% and an initial conversion premium of 30% to 35%, according to a news release.

The Regulation S offering may be increased by as much as €70 million for a maximum deal size of about €550 million if the extension clause is exercised.

BNP Paribas is among the bookrunners of the offering, which is set to price March 25, with settlement seen March 28.

Current shareholders have priority subscription rights for three days until March 22. And the French Republic will participate during the priority subscription period for up to its current 15.9% stake in Air France-KLM's share capital.

The bonds mature and will be redeemed in cash at par on Feb. 15, 2023. The bonds can be called in certain circumstances, and there is a bondholder put on Feb. 15, 2019 at par plus accrued interest.

The conversion or exchange ratio will be one new or existing Air France-KLM share per bond.

Proceeds will be used for general corporate purposes, including finance of its fleet and to allow for optimum debt repayment. The group's maturing debt in 2013 is €1.3 billion.

Sixty percent of the proceeds will be made available to Air France and 40% will be made available to KLM.

Air France-KLM is an airline business that includes Paris-based Air France and Amsterdam-based KLM.

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