WHEN EGYPTIAN COMPANY Weather Investments bought Italy’s Wind Telecom for €12.1 billion last August, analysts heralded the deal as a benchmark transaction. It was, at that time, Europe’s biggest-ever leveraged buyout and also the largest-ever acquisition in Europe by a Middle East/Africa concern. Just as impressive is the financing strategy behind the acquisition. One element is an €825 million exchangeable bond that was issued in February.
The seven-year bond proved a big hit with investors and was several times oversubscribed. The deal, which was lead managed by Citigroup, Credit Suisse and Deutsche Bank, carried a coupon of 4.75% and traded up in the secondary market. The bond is exchangeable into shares of Weather if it lists or, if not, into the global depositary receipts of Orascom Telecom Holding, another company which forms part of Weather owner Naguib Sawiris’s...
