The Belgian Delhaize Group wants to equate some modalities of two long-term bonds, which were issued by subsidiary Delhaize America, with those of the bonds of the parent company. Owners of the bonds that agree to the offer, will get a bonus of fifteen dollar per thousand dollar in bonds.
250 million euro
The first bond has a coupon of 8.05% and ends in 2027, the second has a coupon of 9% and ends in 2031. Respectively 70.7 million dollar (about 50 million euro) and 271.4 million dollar (200 million euro) in bonds are currently outstanding.
The bonds were issued by Delhaize America in 2011 and served to pay for the takeover of the chain Hannaford. Since then Delhaize America has not entered into any new long-term loans. Delhaize instead chose to centralise them all on a group level.
First attempt in 2011
Because of this, parent company Delhaize already made an offer in 2011 on the bonds issued by Delhaize America and it proposed to convert them to ones of the parent company, with a day of payment in 2040 and a coupon of 5.7%. Back then not all investors agreed.
Now it wants to equate all modalities of the remaining bonds with those of the parent company. To persuade investors to take the offer, Delhaize is offering them a bonus of 15 dollar per bond of 1000 dollar. The core characteristics (issuer, due date and the coupon) will remain the same for those who make the transition.