Michelin Issues 610 million euro Convertible Bond

Michelin is issuing a 610 million euro convertible bond, which has the option of increasing to 700 million. According to a Deutsche Bank report, the move surprised us analysts as they expected company management to focus on generating “strong free cashflow.” However, the analysts added, “conditions look favourable: premium of 35-40 per cent on share price; limited dilution (potentially around 6 million shares); and limited cost (3.4 per cent).”