Stock

Wirecard debt that facilitated SoftBank funding put up for public sale

2/2
© Reuters. FILE PHOTO: The logo of Wirecard AG is pictured at its headquarters in Aschheim

2/2

By Abhinav Ramnarayan

LONDON (Reuters) – Convertible bonds that were part of a complex transaction that allowed Japan’s SoftBank Group (T:) to buy a stake in now-collapsed payments company Wirecard (DE:) and then de-risk the transaction have been put up for sale in an auction.

In a process managed by Credit Suisse (SIX:), bonds convertible into Wirecard debt with a nominal value of 900 million euros ($1.01 billion) will be sold via an auction set to close on July 8, according to a document seen by Reuters.

Many of Wirecard’s creditors are eager to sell their exposure to the now-insolvent company, as police have raided the German firm’s offices and its administrator has started selling its assets.

The auction should end one of the most complex acquisition structures seen in recent times. Instead of buying a direct stake in Wirecard, SoftBank bought bonds that could be repaid with Wirecard shares.

Soon after, however, Credit Suisse sold 900 million euros of new bonds to investors linked to the convertible bond held by SoftBank, which would be convertible into Wirecard shares. This transaction effectively repackaged SoftBank’s convertible bonds and sold them on at a profit for the Japanese investor.

The structure is one made famous by billionaire investor Warren Buffet, who used to buy stakes with little risk to his company Berkshire Hathway before benefiting immediately from the boost to the share price from his involvement.

The auction would likely represent a significant loss to investors currently holding the convertible bonds; the linked Argentum convertible bonds were trading at a cash price of 13.5 cents on the euro on Thursday, having been as high as 73.5 just three weeks ago.

(This story corrects stock symbol to Softbank (OTC:) Group, not Softbank Corp, in paragraph one)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles