(Corrects IPT level on NC10 tranche after erroneous lead communication)
By Laura Benitez
LONDON, June 7 (IFR) - Volkswagen has set the yields for an expected €3.5bn dual-tranche hybrid bond, according to a lead bank.
The perpetual non-call 5.5-year bond will yield 2.75% and the perp non-call 10-year 3.875%. Initial price talk was 3% area and 4.125%-4.25% respectively.
Total orders have surpassed €9bn so far for the two benchmark bonds and the books close at 11:15am. The deal is expected to price later today.
Bank of America Merrill Lynch (B&D), CA-CIB, Goldman Sachs, HSBC and MUFG are lead managers.
The bonds are expected to be rated Baa2 by Moody’s and BBB- by S&P. The issuer is Volkswagen International Finance NV with Volkswagen AG acting as guarantor. The guarantor’s senior ratings are A3/BBB+ (both negative outlook).
Reporting By Laura Benitez; editing by Alex Chambers, Julian Baker