Eroski €394 million bond exchange offer

Overview:

• Eroski—a Spanish supermarket chain—has made a public offering of exchange of Aportaciones Financieras Subordinadas (AFSE – perpetual subordinated debt obligations with a equity nature from an accounting perspective) by newly issued subordinated debt obligations.
• The exchange offering was addressed to all the owners of AFSE issued by Eroski for a nominal value of €660 million and the complete exchange equation consisted, in relation to the nominal value of each AFSE, of 30% write-off; 15% cash payment; and 55% exchanged by newly issued subordinated obligations.
• It is the first time that an AFSE has been exchanged by another type of debt obligation requiring analysis on the nature of each debt instrument and the legal consequences of the referred exchange.

Adam Majeed - Regional editor