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Midday Commentary: SINA sells $700 million 1% five-year convertible notes, active in trade
By Cristal Cody
Tupelo, Miss., Nov. 15 - SINA Corp. said on Friday that it sold $700 million of 1% five-year convertible senior notes with about a 45% initial conversion premium in a Rule 144A transaction, and the issue traded actively in the morning session, according to market sources.
SINA said in a news release that the notes due Dec. 1, 2018 will be convertible into the company's ordinary shares, at the option of the holders, based on an initial conversion rate of 8.0841 ordinary shares per $1,000 principal amount of notes. The rate represents about a 45% conversion premium over the closing trading price of the company's ordinary shares of $85.31 per share on Thursday.
The offering includes a $100 million greenshoe.
Goldman Sachs Asia was the bookrunner.
SINA will not have the right to redeem the notes prior to maturity except for certain circumstances involving changes in tax laws.
Holders have the right to require the company to repurchase all or part of the notes for cash on Dec. 1, 2016 or upon the occurrence of certain fundamental changes.
The company plans to use $100 million of the proceeds to repurchase outstanding shares and the remainder for general corporate purposes, including working capital needs and potential acquisitions.
SINA is a Shanghai-based online media company that serves China and the global Chinese communities.
In early trading on Friday, the 1% convertible notes due 2018 were quoted at 101 bid versus the underlying share price of $85.15, a market source said.
"Who knows how many SINAs traded," the source said. "The whole volume on the day is $120 million."
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