March 23, 2017 / 12:54 PM / 4 months ago

Volkswagen wins over investors in bond market return

2 Min Read

LONDON, March 23 (IFR) - Volkswagen has attracted €25bn of demand for a €8bn multi-tranche bond issue according to a lead, the issuer's first euro unsecured bond issue since the emissions cheating scandal.

The automaker has set final terms for a €2.5bn March 2019 floating rate note at 30bp over three month Euribor. The note was initially marketed at 45bp area over three month Euribor.

Volkswagen has launched a €1.5bn March 2021 tranche at 45bp over mid-swaps, 15bp tighter than the 60bp area over mid-swaps initial price thoughts.

A €1.5bn October 2023 tranche has been launched at 80bp over mid-swaps, 15bp tighter than the initial level of plus 95bp area.

The issuer has set final terms for a €2.5bn March 2027 tranche at 115bp over mid-swaps, after marketing the transaction at 130bp area over mid-swaps.

Final books, pre-reconciliation, stood at €25bn, with allocation and pricing this afternoon. More than €6bn of orders were placed for the March 2019 note, over €4.5bn for the March 2021 tranche, in excess of €5.75bn for the October 2023 bond and more than €8.75bn for the March 2027 note.

Barclays, BNP Paribas, Citigroup, Mizuho, Societe Generale and UniCredit are lead managers.

The expected issue ratings are A3 from Moody's and BBB+ from S&P (both with negative outlooks). (Reporting by Robert Hogg, Editing by Helene Durand)

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