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. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Tailored to the times

With so many corporates under pressure to raise cash, and understandably loath to sell off holdings at depressed prices in a weak market, the hunt for higher valuations is driving a wave of complex structured equity deals.

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 a block trade in USAI or an exchangeable bond, Vivendi entered into a series of hedging arrangements with Deutsche Bank, the upshot of which was that it effectively disposed of some of the warrants - 21 million with an exercise price of $27.50

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.


Unlimited access to and

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


Unlimited access to and, 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


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