(Corrects IPT level on NC10 tranche after erroneous lead communication)
By Robert Hogg
LONDON, June 7 (IFR) - Volkswagen has set final terms for a €3.5bn dual-tranche hybrid bond, according to a lead.
The perpetual non-call 5.5-year bond, sized at €1.5bn, will price at a yield of 2.75% and the €2bn perpetual non-call 10-year note will come at 3.875%. Initial price talk was 3% area and 4.125%-4.25% respectively.
Pre-reconciled orders have surpassed €11bn, with a slight skew to the 10-year. 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 Robert Hogg; editing by Sudip Roy, Julian Baker)