Fosun seals USD500 million convertible bond deal

By VCPOST Staff Reporter

Nov 08, 2013 07:59 AM EST

Fosun International, the largest privately-owned conglomerate in China, managed to raise HKD3.875 billion (USD500 million) in its guaranteed and secured convertible bonds (CBs) sold to investors at Wednesday's market closing. The deal came after a year-round consistent strong share price performace and a high-yield rating from financial services companies Standard and Poor's and Moody's. Fosun earned a BB+ and Ba3 ratings respectively, according to Finance Asia.

The Fosun deal, arranged by multinational financial service providers Morgan Stanley and UBS, attracted over 70 investors. The five-year bond due in 2018 comes with a three-year put option, three-year call option and was subject to a 130% hurdle. The CBs were at par and had similar collateral and guarantee package as Fosun's other CBs maturing in 2016 and 2020.

Denominated in HK dollars, the deal was originally priced at HKD3.875 billion (USD500 million) with an upsize option of HKD1.55 billion (USD200 million). However, the closing size retained the base price of USD500 million after the latter was not put into effect.

The Fosun deal was also offered with a coupon ranging 0.5% to 1.5%, a further yield of 2.0% to 2.75% and a conversion premium of 32.5%. These transleted into an initial conversion price of HKD10.

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