On March 24, Arcelor Mittal, the world’s leading steelmaker, successfully launched a EUR 1.3 billion issue of bonds convertible to or exchangeable for new or existing shares (“Océanes”) maturing in 2014. The purpose of the issue was to refinance the group’s debt by extending its maturity.

Calyon was the transaction’s joint lead manager and joint bookrunner alongside Société Générale. The deal was initiated and proposed to Arcelor Mittal by Calyon and marked the reopening of the convertibles market, since it was the first issue carried out in Europe over the past nine months. It was also exceptional in terms of size, since no issues for similar amounts have been made for two years.

Its success is highly visible: initially Arcelor Mittal intended to raise €750 million, which was then raised to €1.1 billion and finally to €1.25 billion with the exercise of the green shoe option.

The placement benefitted from several favorable circumstances:

• The large amount of liquidity held by investors.
• The deal’s scarcity effect, since no comparable product had been issued for the previous nine months.
• The Arcelor Mittal name: a CAC 40France's main stock market index. The CAC 40 is a capitalisation-weighted composed of the forty most heavily traded stocks that are considered to be most representative of the market. The level of the CAC 40 is used as an indicator of general trends in the stock market.
  "CAC" stands for Cotation Assistée en Continue (continuous quotation of a stock from opening to close on the Paris Bourse), and the number "40" refers to the 40 stocks from the official list used for the sample. flagship, highly liquid and volatile stock with an attractive share price and credit market rating.
• Powerful momentum built up during the transaction, with strong demand from very high quality investors and a good reception on the Paris stock market where the share price rose.

In the end, in terms of both the coupon and the issue premium, Calyon succeeded in obtaining for the client the tightest terms in the range presented to the market. The high rate of over-subscription was an indicator of the transaction’s success and caused Calyon to close the books very quickly at 10:30 on the morning of the issue’s launch.

About the issue:

“This issue’s success can be attributed to three factors: the early identification of an excellent market opportunity, our excellent relationship with the client, and rapidity coupled with execution reliability. Our staff managed to mobilize rapidly and efficiently so that the deal was completely wrapped up in two weeks, a record for this type of issue.”, precise Jérôme Bernard, Senior Banker for Arcelor Mittal.

“The client trusted us, and we were thus able to reopen this market thanks to our excellent knowledge of the convertible bond market. This deal is therefore entirely exceptional; it successfully reopened the primary market for convertible bonds by proposing to investors the right issuer profile with Arcelor Mittal, together with the right pricing.”, add Benoît Bout, Head of Equity Linked, Equity Capital Markets.