Intel and Samsung bring innovation to CB market

In a first for the international equity-linked markets, an issuer has launched an exchangeable into a convertible.

Jackie Horne

April 26, 2001

A $210 million exchangeable by Intel into a heavily in-the-money private placement convertible for Samsung Electronics marks one of the most unusual structures to appear in the international equity-linked market for some time. Essentially, the deal is very similar to two private placements Samsung Electronics convertibles to Dell and Apple recently re-packaged for the public markets via Morgan Stanley.

The main difference is that instead of selling the original convertible straight back into the market, Intel has tried to score an additional conversion premium and backed the deal with its own credit. Since this carries a negative yield-to-maturity, Intel has, in the process, also got the market to pay for the privilege of holding its debt.

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