MILAN, March 11 - Stellantis said on Wednesday it has priced a multi-tranche hybrid bond offering equivalent to 5 billion euros, executing the transaction weeks after the company disclosed multi-billion euro charges tied to a major change in its electric vehicle (EV) plans.
Last month the automaker recorded 22.2 billion euros in impairments after scaling back its previous EV push. The strategic shift - which management described as a recalibration after overestimating how rapidly consumers would transition to fully electric vehicles - included a decision to issue up to 5 billion euros in non-convertible subordinated perpetual hybrid bonds to maintain a robust balance sheet and preserve available liquidity.
The bond package, which Stellantis said was executed on Tuesday, comprises three distinct tranches:
- 2.2 billion euros in perpetual fixed-rate resettable notes with a 5.25-year non-call period and a 6.25% coupon;
- 1.8 billion euros in perpetual notes with an 8-year non-call period and a 6.875% coupon;
- 865 million pounds in perpetual notes with a 6.5-year non-call period initially paying an 8.25% coupon.
"This issuance will further strengthen Stellantis' capital structure and liquidity position," the Jeep-to-Peugeot maker said in a statement. The settlement of the notes is expected on March 16.
Stellantis, whose portfolio includes brands such as Jeep, Peugeot, Ram, Chrysler, Fiat and Citroen, said it will place more emphasis on hybrid powertrains and internal combustion models compared with the earlier EV-centric approach under former CEO Carlos Tavares. Management has argued that consumer demand for fully electric vehicles has fallen short of prior projections, particularly in the United States.
The company said it will unveil a new long-term business plan on May 21. Currency references included in the transaction materials note that $1 equals 0.8595 euros and $1 equals 0.7441 pounds.
Context and implications
The issuance of perpetual subordinated hybrid notes is intended to bolster liquidity and capital buffers following a pronounced write-down tied to strategic realignment. The specific structure - three tranches with staggered non-call periods and differentiated coupons - reflects an attempt to match investor appetite with financing needs while maintaining perpetual subordinated status.