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Freshfields advises Siemens Energy on its mandatory convertible bond of €960 million

Global law firm Freshfields Bruckhaus Deringer (‘Freshfields’) has advised Siemens Energy AG on the indirect issuance of a mandatory convertible bond in the total nominal amount of €960 million. It represents the largest issue of a mandatory convertible bond in Germany in the past six years.

The mandatory convertible bond, which was placed exclusively with institutional investors under exclusion of shareholders' subscription rights, has a term of three years, an annual interest rate of 5.625 percent and a conversion premium on the maximum conversion price of 17.5 percent in relation to the reference share price. The mandatory convertible bond is to be included in trading on the Open Market of the Frankfurt Stock Exchange.

The mandatory convertible bond was issued by a wholly owned subsidiary of Siemens Energy AG and is guaranteed by Siemens Energy AG on a subordinated basis. At maturity, the convertible bonds will be mandatorily converted into Siemens Energy AG shares (conversion obligation). Due to this special structure, the mandatory convertible bond is to be attributed to equity by the rating agencies, thereby strengthening not only the liquidity but also the equity base of Siemens Energy AG. In addition to capital markets and corporate law issues, Freshfields also advised Siemens Energy AG on the issue with regard to tax law and Dutch law.

The net proceeds of the bond issue will be used to partially finance the voluntary cash tender offer for all outstanding shares of Siemens Gamesa Renewable Energy, S.A. announced by the company in May 2022. Freshfields had already comprehensively advised Siemens Energy AG on the voluntary cash tender offer.

The Freshfields team comprised Partners Rick van Aerssen and Simon Schwarz as well as Principal Associate Nikolaus Bunting and Associate Maren Abraham (all Global Transactions, Frankfurt) as well as Partner Philipp Redeker and Counsel Peter Stark (Frankfurt, both Tax). On Dutch law, Partner Thijs Flokstra, Counsel Tim Elkerbout and Associate Daniel van Loggerenberg (all Global Transactions) as well as Partner Eelco van der Stok and Senior Associate Daan van Schaik (both Tax, all Amsterdam) advised.