The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

France Telecom sets the bid tone

Issuer: France Telecom Size: e16 billion Bookrunners: ABN Amro Rothschild, Goldman Sachs, BNP Paribas

France Telecom's share price

 
 Source: Reuters

A massive, well-flagged, marketed rights issue for a heavily indebted European telco during a war is by no means a sure-fire deal. So France Telecom's success in selling an astonishing e16 billion-worth is remarkable.   The credit arguably belongs more to France Telecom than to any of the 21 underwriting banks. In a first for the equity capital markets, the issuer created a bidding process for the underwriting. At about 8pm on Friday, April 21, France Telecom asked 24 banks to indicate how much they would be willing to underwrite at a price of between e13 and e16, effectively building its own book.

Advised on the bidding process by Commerzbank, France Telecom structured the fees to encourage banks to bid aggressively. Bidders allocated more than e1 billion received 2.5%, banks that bid more than e1 billion but were allocated less got 2.25%, while banks that bid less than e1 billion got only 2%. The eight global coordinators got an additional 12.5 basis points and an 80bp success fee - half if the deal went well and half if the bank successfully distributed its rights.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree