Linklaters advises on Vodafone’s £3.4bn mandatory convertible bond deal

Linklaters has advised Vodafone as it raised £3.4bn in the largest mandatory convertible bond ever. The landmark transaction also represented the largest ever sterling convertible bond deal. Linklaters also advised Vodafone in relation to an associated hedging strategy, designed to give Vodafone the ability to mitigate any share price appreciation during the term of the bonds (should Vodafone decide to execute a share buyback).  

The bonds are being issued in two tranches of £1.72bn each, maturing and mandatorily converting into ordinary shares of Vodafone in March 2021 and March 2022, respectively. 

The net proceeds of the bonds will be used as part of the financing for Vodafone’s acquisition of the European assets of US cable television provider Liberty Global. 

BNP PARIBAS, BofA Merrill Lynch, HSBC, J.P. Morgan and Morgan Stanley are Joint Global Coordinators and Joint Bookrunners.

The Linklaters team was led by Capital Markets partner Richard O’Callaghan and managing associate Rory Renshaw, with partner Vinay Samani and managing associate Marina Antonova advising on the hedging aspects. 

In 2018, Linklaters advised Vodafone on its US$11.5 billion bond offering, which represents the second-largest U.S. high-grade bond to price in 2018. It also advised on Vodafone’s EUR4.2bn issue of hybrid capital securities, the net proceeds of which are also to be used as part of Vodafone’s acquisition financing, and which represented the largest ever M&A-related hybrid transaction. 

Vodafone expects to complete its EUR 18.4bn acquisition of Liberty Global assets in mid-2019, subject to competition clearance.