| At a glance: Issuer: 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