Acciona Selling $510 Million Convertible Bonds to Refinance

Jan 16, 2014 12:59 pm ET

(Updates to close shares in sixth paragraph.)

Jan. 16 (Bloomberg) -- Acciona SA is marketing debut convertible bonds as the Spanish builder that skipped its last dividend seeks to extend debt maturities and cut borrowing costs.

The builder with power, water and transportation projects in more than 30 countries wants to complete the offering of as much as 375 million euros ($510 million) of five-year notes before tomorrow, Alcobendas-based Acciona said in a filing.

Acciona and many European power generators, including Germany’s RWE AG, were hurt by slow demand growth and a wave of regulations that undercut income. They’ve had to alter business strategies, with RWE and Acciona shifting their focus toward renewables-project development and away from capital-intensive investment, ownership and operation.

In Acciona’s case, the moves helped improve its risk profile, as did the drop in Spanish sovereign interest rates. With about 7.4 billion euros of net debt, largely in bank loans, Acciona has seen its one-year default probability drop to 2.3 in 1,000 from 3.6 in 1,000 over the last six months, according to data compiled by Bloomberg.

The new bonds will be sold with a 3 percent coupon and can be exchanged into new shares or existing stock at a premium of 32.5 percent above the volume-weighted average share price, the company said.

Acciona fell for the first day in 10, dropping 1.9 percent to close at 47.45 euros. That cut its gain in the new year to 14 percent, still more than double the 5.5 percent increase in the Madrid Stock Exchange General index for 2014. The stock lost 26 percent in 2013 and 16 percent the previous year.

HSBC Holdings Plc is the sale’s sole global coordinator. Credit Agricole SA, Societe Generale SA and Royal Bank of Scotland Group Plc are joint bookrunners.

--Editors: Alex Devine, Reed Landberg