AT&S places €400M perpetual convertible bond
What's the deal? Austrian circuit board maker AT&SDealroom has a profile for this one. Try Dealroom → has placed a €400M ($448M) deeply subordinated perpetual convertible bond — a hybrid instrument that blends debt and equity. The bond pays 2.5% annual interest initially and can be converted into AT&S shares at a 30% premium to the reference price. J.P. Morgan, Deutsche BankDealroom has a profile for this one. Try Dealroom →, and Citigroup acted as joint global coordinators, with Erste GroupDealroom has a profile for this one. Try Dealroom → and Raiffeisen Bank InternationalDealroom has a profile for this one. Try Dealroom → also involved.
AT&S said it will use the proceeds for general corporate purposes, including refinancing existing debt and strengthening its capital base. The bond is expected to settle around June 23, 2026, and will be admitted to trading on the Vienna Stock Exchange's MTF.
Why now? AT&S chief financial officer Gerrit Steen said the refinancing of existing debt would deliver "material coupon savings" compared to the company's outstanding capital market instruments. The hybrid structure also optimises AT&S' capital base — deeply subordinated bonds often receive partial equity credit from rating agencies, improving leverage metrics without diluting shareholders immediately.
Strong investor demand suggests favourable market conditions for convertible issuances, giving AT&S a window to lock in a low 2.5% coupon.
What could go wrong? The bond is perpetual, meaning it has no fixed maturity — though AT&S can redeem it early under several conditions, including after August 2029 if the share price exceeds 150% of the conversion price. If AT&S' stock underperforms, conversion becomes unlikely, and the debt remains on the books indefinitely.
The company also retains the right to defer interest payments, which could unsettle bondholders if financial conditions deteriorate. After the first reset date, the coupon jumps to a 5-year mid-swap rate plus a 1,000 basis point margin — a steep step-up that incentivises early redemption but also signals higher costs if AT&S can't refinance.
The signal: AT&S is a mature, Europe-based manufacturer specialising in high-end printed circuit board technology — a critical link in the semiconductor supply chain that has drawn growing strategic attention as the EU pushes to bolster domestic chip capabilities. The choice of a hybrid convertible bond, rather than a straightforward equity raise or senior debt issuance, underscores how capital-intensive hardware companies are getting creative to fund reinvestment without immediate shareholder dilution, particularly as global demand for advanced substrates and interconnect technology accelerates alongside AI infrastructure buildouts.
Read more: ad-hoc-news.de
