Sainsbury’s is issuing £250m-worth of convertible bonds

Sainsbury's is issuing £250m-worth of convertible bonds as it looks to shore up the group's pension funds, among other corporate interests. 

 

The bonds will have no fixed redemption date and can be converted into fully paid new or existing ordinary shares any time before the seven days ahead of the first reset day in July 2021. Until that point the bonds will have an expected yield of between 2.5 per cent and three per cent.  

 

The initial conversion price is expected to be at a premium of 30 to 35 per cent to the volume weighted average price of the ordinary shares on the London Stock Exchange between launch and pricing.

  

The final terms of the bonds are expected to be announced today, and the closing date is 30 July.  

 

The bonds to be listed on the official list of the Channel Islands Securities Exchange Authority Limited before the first interest payment date.

 

On top of this, Sainsbury's is launching an unrated benchmark non-convertible hybrid capital transaction. 

 

Deutsche Bank, Morgan Stanley and UBS are acting as joint bookrunners on both transactions.