Nokia to offer senior convertible bonds to investors

PanARMENIAN.Net - Finnish smartphone maker Nokia announced that it is to offer senior convertible bonds due in 2017 to a number of international investors as it seeks to raise €750 million ($979 million) to better manage its capital structure, address debt and improve liquidity, The Next Web reports.

In a filing with the Frankfurt Stock Exchange, Nokia said that it will issue bonds in an “aggregate principal amount of EUR 750 million,” carrying a coupon of between 4.25 percent and 5 percent per year, payable on April 26 and October 26 in each year, commencing around April 26, 2013.

The conversion price has been calculated to be between 28 percent and 33 percent above the average price of Nokia shares on the NASDAQ OMX Helsinki exchange, opening trading around October 26.

The issuing of convertible bonds allows Nokia to minimize the negative interpretation of its corporate structure. If the company was to issue common stock, investors may see its actions as a way of notifying them that their stock was overvalued, but with bonds, they can still convert them to stock later down the line if the company’s share price continues to improve, TNW says.

For Nokia, the move comes less than a week after it published its financial results for the third quarter of 2012, reporting a $754 million (576 million euros) operating loss on $9.49 billion in net sales (7.239 billion euros).

Nokia only sold 2.9 million Lumia devices, down from 4 million in the previous quarter (or 27.5 percent), with a meager 6.3 million smartphones sold in total, down 63 percent compared to last year. Feature phone sales were up 4 percent quarter-on-quarter but down 15 percent year-on-year to reach 76.6 million units.