Ferrari - NO IPO for 2006

I saw this in the WSJ today :

bonds were fully taken. And lots of investors were left empty-handed. "There were requests for three billion euros, but we sold them for one billion", declared the managing director of Fiat, Sergio Marchionne, yesterday.

In other words, the demand was three times the offer. It was an unexpected welcome which might nevertheless be partially justified by the journey accomplished by the car House until now. As the manager explained yesterday (after saying that in Germany, in the month of January, the registrations of the group went up by 64.7 per cent, until 5,063 units), "Fiat is achieving a new position in Europe.

We are getting the first results from the work carried out in 2005. It is necessary to go on by following that direction, day after day". However, Marchionne pointed out that, in spite of the first encouraging signs, Europe is an extremely difficult market, requiring an intense team work.

At the same time, the manager spoke about the Ferrari question again, confirming that the listing of the company on the Stock Exchange is excluded in 2006. On the other hand, once again, the managing director declared to be ready to support Mediobanca "if it wanted to go out"; pointing out that Fiat "would work with them to find out a solution". Later on, in relation to that question, Marchionne added that at present "there are actually no results".

Going back to the bonds, following the announcement made last January 30th about a seven-year benchmark bond issue in euros, Fiat confirmed that the offer would equal one billion euros, expiring in 2013, and its issue price would be one hundred per cent of its nominal value, with a fixed coupon of 6.625 per cent.

The acknowledged premium was thus 335 basic points over the government security of reference. The values were in line with expectations and in harmony with the quotations currently expressed by the market, as well as with the ratings of the company, that is, Ba3 by Moody's and Bb- by S&P and Fitch.

The coupon, located in the lower part of the price indication (6.625%-6.75%), will be paid every six months. The regulation of the offer is expected on Friday, 10 February 2006, and the securities will be issued by Fiat Finance and Trade, a company entirely controlled by Fiat, and they will be guaranteed by Fiat SpA.

The bond loan will be placed just outside the United States. Yesterday, among other things, there was the umpteenth meeting between Fiat and the Welfare Minister, Roberto Maroni, to tackle the question linked with the one thousand redundancies within the car House from Turin.

At the end of the summit, the person in charge of the industrial relations for Fiat group, Rebaudengo, just declared that "a few things about our reorganization plan were closely examined. For that plan, we had asked for long mobility".

Later on, Rebaudengo (in relation to what was discussed with the Ministry) added that Fiat "believes it is important to understand the position of the unions, to decide whether these instruments can be applied or not".

The Welfare Under-Secretary, Maurizio Sacconi, pointed out that "as for Fiat, it is ready to use the instrument of staff re-employment, with a few variants". Today, there will be the meeting with the social parties. (All rights reserved)