DaimlerChrysler announced today that it has successfully priced a $2 billion global electronic bond issue offered in two tranches. The first tranche was $1 billion of five-year notes with a coupon of 7 3/4 percent priced at 99.556 to yield 7.858 percent. The second tranche was $1 billion of 10-year notes with a coupon of 8 percent priced at 99.861 to yield 8.02 percent.
This transaction marks the company’s first comprehensive global e-bond offering as all bids and secondary trades of the bonds are capable of being processed on-line. The transaction was lead-managed by Goldman, Sachs & Co.
“This global e-bond offering reflects the innovative and forward-looking approach to technology that investors and customers expect of DaimlerChrysler,” said Dr. Manfred Gentz, Chief Financial Officer of DaimlerChrysler AG.
The transaction employed electronic new-issue features such as electronic dissemination of issue information and electronic submission of indications of interest. Over 40 percent of indications of interest received by Goldman Sachs were submitted over the internet. After the issue was priced, it began trading electronically in the secondary market. Institutional investors are able to buy or sell bonds through Goldman Sachs’ proprietary secondary trading system called Web.ET.
DaimlerChrysler’s global e-bond is the first corporate bond issue to use this new technology for trading in the secondary market. Web.ET’s point-and- click trading technology became available for trading U.S. Treasury securities in September 1998 and U.S. Agency securities in October 1999.
Electronic new issuance and trading provide transparency for issuers and investors. Electronic new issuance also provides transparency for the issuer in terms of its ability to see “the book being built” in real time.
Electronic trading allows both buyers and sellers to have access to live market quotes for the bonds. The ability to trade corporate securities electronically, in addition to the traditional trading channels, enhances not only price transparency but should also enhance liquidity in the secondary market.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The issuing entity of the e-bonds is DaimlerChrysler North America Holding Corporation. The bonds are guaranteed by DaimlerChrysler AG.