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UPDATE 1-Alstom sets spreads for bond exchange offer -banks
Tue Feb 8, 2005 08:54 AM GMT
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LONDON, Feb 8 (Reuters) - French heavy engineering firm Alstom (ALSO.PA: Quote, Profile, Research) on Tuesday set the spreads at which it will exchange 900 million euros of outstanding bonds for new 2010 notes, the banks managing the transaction said.

The heavily indebted maker of high-speed trains and cruise ships which was saved from collapse with a state-backed bail out last year, has stressed it will be able to meet its debt obligations when they fall due but has been seeking ways to make its debt more flexible.

Alstom is offering to exchange its 650 million 5 percent bonds due July 2006 and its 250 million euro auction rate coupon subordinated notes due September 2006 for a new euro-denominated fixed-rate bond due 2010.

The company will exchange the 5 percent notes at a spread of 0.75 percent, or 75 basis points, over the 4.5 percent BTAN due July 2006, and the auction rate notes at a spread of 1.0 percent, or 100 basis points, over 3-month Euribor, the banks said.

The new notes will be issued at a spread of 3.35 percent, or 335 basis points, over the 3 percent BTAN, or French government bond, due January 2010.

The exchange price of the existing and new notes will be set on February 16 but if less than 300 million euros of notes are offered for exchange, the company has the right to withdraw the offer.

Alstom said in late January that it could issue additional notes, subject to market conditions, above those issued for the purpose of the exchange.

BNP Paribas and Merrill Lynch are managing the transaction for Alstom.