Institutional investors were offered options Tuesday on government-owned shares in Deutsche Telekom, the telecommunications giant which remains one-third controlled by the German federal government.
Will the T be completely privately owned at some point in the future?
Investors pitching in for a 3.3-billion-euro ($5.1-billion) credit to federal bank KfW would gain the choice of repayment in money or in about 5 percent of Telekom's overall stock in 2013.
Telekom, formerly a government departure, began its privatization 12 years ago, briefly ballooned in value during the late 1990s technology boom and then fell back. Its shares have been flat since.
Tuesday's announcement by KfW of a convertible-bond issue sent the stock 1.5 percent lower to 11.76 euros as existing owners worried about a glut of the stock. Currently KfW and the federal government own 32 percent of the multinational company.
The move appeared aimed to reassuring markets that Berlin wants to privatize all of Telekom when the price is right.
A KfW spokesman said the bank did not anticipate any long-term negative effect on the share price.
Convertible bonds do not always lead to a transfer of shares.
In 2003, KfW issued 5.0 billion euros in bonds and is expected to repay this August in cash, since the 6.5 per cent of Telekom stock offered as collateral is likely to be worth far less than the conversion price of 17.526 euros per share.
This week's bonds are not available to private or US investors, but will be tradable as securities after the issue.