Hengeler Mueller advises adidas on EUR 500 million convertible bond offering

07. September 2018

adidas AG successfully placed a EUR 500 million equity-neutral convertible bond. The convertible bond has a term of five years and a coupon of 0.05%. The offering was 2.7 times oversubscribed. The issue price was fixed at 104% of the nominal value, corresponding to an annual yield to maturity of -0.73%. The proceeds of the offering will be used for general corporate purposes and to finance a portion of the multi-year share buyback program.

Through the convertible bond, investors can benefit from a positive performance of adidas’ ordinary shares. Investors will have conversion rights in respect to the convertible bond which will be settled in cash by reference to the share price. Due to the cash settlement, the issue and conversion of the convertible bond will not result in the issuance of any new shares of adidas nor will adidas be required to deliver existing shares. Concurrently, adidas is purchasing call options over adidas ordinary shares to fully hedge the economic exposure of adidas to pay cash amounts under the convertible bond upon any exercise of conversion rights by investors.

Hengeler Mueller has advised adidas on this transaction. The team included partners Ralph Defren and Alexander Rang as well as associate Caspar Schmelzer (all Banking/Capital Markets, Frankfurt).