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Consolation for would-be Porsche owners

Issuer: Porsche International Financing plc

Amount: Dm200 million

Launched: April 23 1997

Lead manager: Deutsche Morgan Grenfell

"It was our idea," says Porsche's finance director Holger P Härter. Any finance chief would say the same about his company's bond issue, but in this case it must be true. No banker would have come up with this scheme to sell bonds as status symbols.

This inaugural bond issue from the German luxury car maker was marketed as the latest accessory for the bondholder who has everything. "If you can't have a Porsche in the garage, at least you can buy the bond," says Manfred Ludwig, head of syndicate at Merrill Lynch in Frankfurt, summing up the syndicate's simple sales pitch.

A more original collector's item than model cars, Porsche bonds immediately acquired their own sentimental value. Three times oversubscribed, the issue was allocated in small tickets to reach as many retail investors as possible. Syndicate banks say many bondholders plan to frame the certificates and hang them on their office walls and may never redeem them.

This was the first part of Porsche's scheme to establish its name as a borrower.

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