Royal BAM Group, the Netherlands based construction group which is active in construction and mechanical and electrical services, civil engineering, property and public private partnerships, has announced the successful placement of €125 million (US$142 million) subordinated unsecured convertible bonds due 2021.

Proceeds from the offering will be used to repay the company's existing subordinated loan and for general corporate purposes. The offering is in line with BAM’s financing strategy to strengthen its balance sheet by lengthening the maturity and broadening the sources of its funding. 

The bonds will be convertible into ordinary shares of BAM with a nominal value of €0.10 each. Upon an insolvency event, the claims of holders of the bonds against the company will be subordinated to the BAM’s senior payment obligations.

The bonds will carry an annual coupon of 3.50%, payable semi-annually in arrear on 13 June and 13 December, and a conversion price of €5.2245 which represents a 32.5% premium to the volume weighted average price of the shares quoted on Euronext in Amsterdam between opening of trading on the 6th June 2016 and pricing.  

Royal BAM Group will have the option to call all but not some of the outstanding bonds at their principal amount plus accrued but unpaid interest from 28 June 2019, if the value of the shares underlying a bond exceeds €130,000 for a specified period of time.

The bonds are expected to be issued and settled on or around 13 June 2016. Application will be made for the bonds to be admitted to trading on the Open Market segment of the Frankfurt Stock Exchange within 30 days from the issue date.

Société Générale Corporate & Investment Banking and UBS Investment Bank acted as Global Coordinators and Joint Bookrunners on the Offering, alongside ABN AMRO and ING as Joint Bookrunners.