Vodafone plans to raise £500 million of new debt through new equity-linked bonds due in 2020.
The telco will use the funds for general company purposes and purchasing cash-settled call options.
It will pay between 0.4 percent and 1.2 percent interest per year. The conversion price will be 30 percent above a share reference price that Vodafone will announce around 3 December.
Conversion rights on the bonds will be settled in cash, so Vodafone will not issue any new Vodafone shares meaning that existing shareholders will not see their holdings diluted.