Energy storage company issues convertible bonds

Why do companies issue convertible bonds?

Issuing convertible bonds is one way for a company to minimize negative investor interpretation of its corporate actions. For example, if an already public company chooses to issue stock, the market usually interprets this as a sign that the company's share price is somewhat overvalued.

Why did Siemens Energy issue a mandatory convertible bond?

The issuance of the notes is one component of these announced equity measures. "The swift and successful placement of the mandatory convertible bond indicates institutional investors’ confidence and belief in our overarching Siemens Energy strategy," said Maria Ferraro, CFO of Siemens Energy.

What are Siemens Energy AG's convertible notes?

Siemens Energy AG has successfully placed subordinated mandatory convertible notes with an aggregate principal amount of EUR 960 million. The notes will be convertible into newly issued or already existing registered no-par value shares of the company. Pre-emptive rights of the company’s shareholders to subscribe for the notes were excluded.

When will bonds convert into shares?

They benefit from a subordinated guarantee by the company. After a term of just under three years, the bonds will automatically convert into shares at maturity on 14 September 2025. Conversion before maturity is also possible. Settlement of the Notes is expected to take place on or around 14 September 2022.

Who will issue the Siemens Energy Finance notes?

The notes will be issued by Siemens Energy Finance B.V., based in the Netherlands. The notes are denominated at 100,000 EUR each and will be issued at 100% of their principal amount. They benefit from a subordinated guarantee by the company.

Will Siemens Energy's notes be traded on the Frankfurt Stock Exchange?

Siemens Energy intends to arrange for the notes to be included to trading on the open market segment of the Frankfurt Stock Exchange. As part of the transaction, Siemens Energy will be subject to a lock-up period of 90 days, subject to customary exemptions and waiver by certain of the syndicate banks.