2nd UPDATE: Schneider Electric Plans Two-Part Bond, Tender Offer

9th Jul 2010 14:27

(Adds detail) By Art Patnaude Of DOW JONES NEWSWIRES LONDON (Dow Jones)--French electrical equipment company Schneider Electric SA (SU.FR) is the latest European borrower looking to extend its debt maturity profile by planning a two-part bond issue along with an offer to buy back a shorter-dated note. The bond will consist of a six-year and a 10-year deal, totalling EUR800 million, announced alongside a tender for up to EUR300 million of its exiting 6.75% 2013 bonds, one of the banks running the sale said Friday. Final price guidance on the six-year, EUR300 million bond was set at 73 basis points over midswaps. The order book stood around EUR1.7 billion. The EUR500 million, 10-year portion will price at 88 basis points over midswaps and has attracted an order book of about EUR2.1 billion. The announcement follows recent tenders and new issues from France-based utility group Veolia Environnement (VIE.FR), British American Tobacco (BATS.LN) and U.K. home retail group John Lewis, as companies seek to take advantage of low yields. "Corporates don't necessarily have a need to raise cash, but they are looking for low coupons," said a syndicate banker in London, adding that the pipeline for these kinds of deals is rich and likely to continue in September after the summer lull. Schneider Electric announced the new issue and buyback in order to refinance its notes maturing in August 2010, extend its maturity profile and optimize its financial charges, the bank said. Deutsche Bank AG, HSBC Holdings PLC and Societe Generale SA are bookrunners on the six-year deal, while Bank of American Merrill Lynch, Credit Agricole SA, Deutsche Bank and Societe Generale on on the ten-year. In addition to the two new issues, the company plans to make an offer to buy back its EUR750 million, 6.75%, July 2013 bond for a maximum amount of EUR300 million, at 114.05% of par. The offer expires July 16 at 1400 GMT. Schneider Electric is rated A3 by Moody's Investor Services Inc. The bonds are expected to price later Friday, subject to market conditions. -By Art Patnaude, Dow Jones Newswires; +44 (0) 207 842 9259; [email protected] (END) Dow Jones Newswires July 09, 2010 09:27 ET (13:27 GMT)