IN FEBRUARY, DEUTSCHE Bank launched a e1.06 billion
mandatory exchangeable into USA Interactive, a subsidiary of
Vivendi Universal. That doesn't seem a big deal: financial
institutions are often able to access markets closed to other
issuers. But beneath the surface this was not a
straightforward transaction.
Though Deutsche provided the market with few details about the
transaction, bankers at rival institutions deduced from comparing
the terms and maturities of the warrants and the bonds that the
seller was Vivendi itself. It had owned 60 million warrants in USAI
since 2001, when it acquired some assets of USA Entertainment. On
the back of a strong set of results from USAI, Vivendi was keen to
raise some much-needed cash via a disposal. But it hardly took
genius to work out that another exchangeable from the beleaguered
French media firm would not go down well.
So instead of coming to market with...
