Deal of the month

Author: | Published: 11 Dec 2017

Capital markets meet M&A The UK’s first purchase of equity via mandatory securities

Volcan Investments has funded its purchase of a 19.35% stake in UK mining giant Anglo American via the issuance of two three-year mandatory exchange bonds. The transaction is a first in the European market.

The landmark structure, which now makes Volcan one of the largest shareholders in Anglo American, relies on the sale of a combined £3.5 billion ($4.6 billion) of secured limited recourse mandatorily exchangeable bonds over two separate transactions. It is also known as a purchase of equity via mandatory securities (Poems) transaction, though this is sole bookrunner JP Morgan's own label for this product.

The structure is believed to have been used only once before in the US, but using derivatives instead of bonds.

Chop and change An initial £2 billion was raised via...



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