Fonciere des Regions to Sell $775 Million of Convertible Bonds

Fonciere des Regions SA, the French office landlord with stakes in five other real estate investment trusts, plans to raise as much as 550 million euros ($775 million) in a bond sale to refinance loans.

FDR aims to raise 480 million euros initially by selling convertible bonds maturing Jan. 1, 2017, with an option to sell an additional 70 million euros of securities, the Metz-based company said in a statement today. It will be the FDR’s first bond sale.

The rate at which the bonds may be converted into stock will be 20 percent to 25 percent higher than the weighted average price on May 19. Depending on investor demand, the coupon for the bond will range from 15 basis points less than the calculated yield for five and six-year interest rate swaps to 35 basis points above that measure, FDR said. A basis point is 0.01 percentage point.

The proceeds will allow FDR to “diversify its sources of financing and to lengthen its debt maturity,” the company said.

FDR shares declined 42 cents to 71.33 euros at 9:11 a.m. in Paris trading, valuing the company at 3.92 billion euros.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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