Corporate deal of the year: Dong €1.6 billion hybrid/senior debt dual tranche
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Corporate deal of the year: Dong €1.6 billion hybrid/senior debt dual tranche

The Danish energy group took a risk raising capital through the hybrid market – but it paid off with a textbook deal.

At a glance:
Danske Olie og Naturgas
Deal structure: Hybrid – €1.1 billion 5.5%, due June 3005; senior – €500 million 3.50%, due June 2012
Lead managers: BNP Paribas, Deutsche Bank, Morgan Stanley and Nordea
Date: June 2005

Hybrid bonds were the big new thing in the corporate market in 2005, but the sector suffered a stuttering start. Danske Olie og Naturgas (Dong) had a lot of things workings against it when it approached the institutional market at the beginning of the summer yet its issue was the first clear-cut success. To all intents and purposes the credit was a new one for institutional investors – introducing a new name to the buy side is tricky enough when attempting a senior transaction, let alone a subordinated one.

The company had good reasons for taking on this task. Hybrids have a number of uses but are a very useful tool for treasury functions when trying to finance acquisitions. Dong had taken advantage of the liberalization of the European energy markets to make a number of acquisitions and take increasing stakes in Elsom, Energi E2 and Copenhagen Energy for approximately €3.5

Gift this article