China’s top insurer Ping An seeks to raise US$3.5 billion via convertible bond sale
- Company joins a raft of Chinese firms including JD.com, Alibaba and Trip.com in tapping the cheaper funding source amid high interest rates
The bonds, due in 2029, have a coupon rate of 0.875 per cent per year, and the initial conversion price is HK$43.71 per share on the maturity date, according to a filing on Tuesday. That represents a 21.3 per cent premium over the closing price of HK$36.05 on Monday, the company said.
With full conversion, the bonds would be convertible into around 625 million new shares, which represents about 8.4 per cent of existing H-shares and 3.4 per cent of total shares outstanding, according to the filing.
The net proceeds from the bonds after deduction of issue fees and expenses are estimated to be around US$3.45 billion. Morgan Stanley and JPMorgan are joint global coordinators for the deal.
The company’s stock dropped 5.4 per cent on Tuesday to HK$34.10, near a two-month low, as investors reacted to the potential share dilution and convertible arbitrage strategies.
The issue of the bonds represents “an opportunity to optimise the capital structure and diversify funding sources”, the company said.
