Nomura helps price GlobalWafers' 'unique' exchangeable units issuance

The deal involved the chipmaker's German subsidiary and was the first ever public exchangeable issuance out of a Taiwan group issuer into a non-Taiwanese listed underlying.

January 23, 2024

Taiwanese chipmaker GlobalWafers’ wholly-owned German subsidiary, GlobalWafers GmbH, priced €345.2 million ($375.7 million) exchangeable units for Munich-headquartered Siltronic's shares held by GlobalWafers on January 16, 2024, with the deal closing on January 23. Nomura acted as the sole global coordinator and the sole bookrunner for the offering.

The issuance of exchangeable units helped manage Siltronic’s shares currently held by GlobalWafers' group whilst "recycling its capital and optimising the funding costs in the implementation of its NT$100 billion ($3.18 billion) capex plan", according to a media release. GlobalWafers tried to buy Siltronic, which is a silicon wafer maker, in 2021 but failed to gain regulatory approval; instead it owns 13.67% of the company's shares. 

The exchangeable units are guaranteed by GlobalWafers and are comprised of senior unsecured bonds due 2029 with 1.5% coupon per annum and detachable warrants with the initial exchange price of €111.34, representing a premium of 30% above the reference price.

Sources close to the deal told FinanceAsia: “1.5% was the lowest coupon amongst all EMEA corporate equity-linked issuance in the past 14 months. The deal was significantly oversubscribed with very good investor demand from both outright and technical investors, allowing it to be priced at the mid-point between 1.25% and 1.75% marketing range.”

“The transaction was the first ever public exchangeable issuance out of a Taiwan group issuer into a non-Taiwanese listed underlying. This was a unique and complex transaction given the multiple jurisdictions involved, with a number of bespoke aspects to optimise issuance terms for the issuer. For example, exchangable units was comprised of a bond and a secured warrant, to provide enhanced security to investors. There was a stock lending facility, as well as a concurrent delta placement to a single long-only investor to facilitate hedging by investors,” the sources added.

The deal was also well timed with the strong performance of Siltronic share price in the lead-up to launch, as well as the Taiwanese general election which took place few days prior to the launch.

"The share price of Siltronic fell by 1.4% on the day after the deal was announced – much less than other similar deals of this nature, and the share price has fully recovered by the second day after announcement," the sources added.

The proceeds will be used to refinance existing debts and for general corporate purpose, according to the release.  

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