Size matters for VW's record-breaking euro hybrid

摘要

Volkswagen on Monday was inundated with more than €8bn of orders for a two-part hybrid, but the bulky book did not mean tighter terms for one of the tranches, as the auto firm prioritised issue size rather than price. Following rumours that it was eyeing the market to finance its €6.7bn purchase of the parts of Scania it does not already own, the A3/A- rated German company opened books on perpetual non-call seven and non-call 12-year tranches, setting initial price thoughts at 3.875% area and 4.875%-5%, respectively, equating to mid-swaps plus 255bp area and 285bp-297.5bp. Despite almost €25bn of euro corporate hybrids having been priced in 2013 - the busiest year on record - it remains relatively rare for a company to issue hybrid paper with the express aim of financing M&A activity.