British venture capital firm 3i launched a 500 million convertible bond today, a day after a record issue in German telecom firm Deutsche Telekom, driving its shares down three per cent.
3i also announced that it had invested less in the first half of this year than it did in 2002 and that completing deals had been difficult this year as a grim global economy and political uncertainty delayed decision-making.
The bond, which could be increased to 550 million depending on demand, is convertible into the firm's ordinary shares and the proceeds will be used to refinance existing debt and add to the cash available to make investments.
In May, 3i said it expected its markets to be tough for the rest of the year after being hit by three years of falling stocks.
"We expect to see a lower level of investment for the first half compared with last year but expect this to increase as the year progresses," said Mr Brian Larcombe, chief executive of 3i, in a statement.
"We continue to be confident in the quality of new investment that we are making to drive long term growth."
In April, 3i Group closed its Dublin office, citing the general economic downturn and the slower-than-expected development of the private-equity market in the Republic.