Peugeot talks €500 million seven-year convertibles at 50-125 bps over swaps, up 33%-38%

By Kenneth Lim

Boston, June 23 - PSA Peugeot Citroen SA plans to price €500 million of convertible bonds in the Oceane structure due Jan. 1, 2016 on Friday with price talk at a coupon of 50 to 125 basis points over swaps and an initial conversion premium of 33% to 38%.

The bonds will be issued at the initial conversion price.

Societe Generale Corporate & Investment Banking, Calyon, Citigroup Global Markets Ltd. and HSBC are the bookrunners of the Regulation S offering.

There is an over-allotment option for an additional €75 million that may be exercised by June 29.

The bonds will also be offered to the public and existing shareholders. The Fonciere, Financiere et de Participation company, which currently holds a 22.13% stake in Peugeot, will subscribe for €50 million to €57.5 million of the convertibles.

The convertibles are non-callable until Jan. 1, 2013, after which they may be called subject to a threshold at 130% of the conversion price. There are no puts.

There is a change-of-control put and dividend protection.

Proceeds will be used to provide general financing needs and for existing and future development projects in the automobile business. The capital will also extend the company's debt maturity profile with no significant repayment until 2011.

Peugeot is a Paris-based automaker.

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