China Shipping plans RMB 3.95 billion of 0.5%-3% six-year convertibles

By Angela McDaniels

Tacoma, Wash., Jan. 31 - China Shipping Development Co. Ltd. plans to issue RMB 3.95 billion of six-year convertible bonds, according to a company news release.

Existing shareholders will be given preference. Any convertibles that are not subscribed for by shareholders will be sold in China in an underwritten offering.

The convertibles will have a face amount of RMB 100 each, and the interest rate is expected to be 0.5% to 3%.

The bonds will become convertible six months after issuance.

The initial conversion price will not be lower than the higher of the average trading price of the company's class A shares for the 20 trading days before the offering memorandum is issued and the average trading price of the class A shares on the trading day immediately before the memorandum is issued.

The conversion price will be subject to adjustment if the company's shares trade below 90% of the conversion price for 10 or more trading days out of any 30 consecutive trading days.

The convertibles will be callable if the company's shares close at or above 130% of the conversion price for 15 trading days out of any 30 consecutive trading days or if the principal amount outstanding of the convertibles is RMB 30 million or less.

During the final two years of the convertible period, the bonds will be putable if the company's shares close below 70% of the conversion price in any 30 consecutive trading days.

The proceeds will be used to fund ongoing vessel construction.

The offering is subject to shareholder and regulatory approvals.

The Shanghai-based shipping company said it will apply to list the convertibles on the Shanghai Stock Exchange.

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