By Abigail W. Adams
Portland, Me., Jan. 18 – Country Garden Holdings Co. Ltd. priced HK$15.6 billion in one-year zero-coupon convertible bonds on Jan. 16 to yield 0.75% with an initial conversion premium of 20%, according to an announcement.
Goldman Sachs was the sole bookrunner for the offering, which Country Garden sold through subsidiary Smart Insight International Ltd.
The 0% convertible bonds due 2019 carry a conversion price of HK$20.556 and an initial conversion ratio of 758,902,510.
The conversion price represents an initial conversion premium of 20% versus the subscription price for a concurrent sale of stock and an initial conversion premium of 15.6% from the Jan. 16 closing price.
The bonds are convertible after March 11, 2018. Smart Insight may call the bonds for tax reasons, or if 90% or more of the principal amount has been converted or redeemed, according to a company release.
The bonds will be redeemed at 100.75% of the principal amount at maturity.
There is takeover protection. Holders may force redemption upon a change of control or delisting event at Country Garden.
Concurrently with the bond sale, Goldman Sachs as placement agent sold HK$7.88 billion, or 460 million existing Country Garden shares at a price of HK$17.13.
The shares were sold by Concrete Win Ltd., a British Virgin Islands company owned by Yang Huiyan, an executive director of Country Garden. As part of the placing, Concrete Win agreed to buy the same number of shares from Country Garden at the same price as the placing, or a net price of HK$16.99.
Concrete Win Limited and Country Garden shareholders Genesis Capital Global Ltd. and Golden Value Investments Ltd. have agreed to a lock up for 90 days following the closing date of the bonds.
The bonds will be listed for trade on the Singapore Exchange Securities Trading Limited.
Proceeds will be used for the repayment of China Holdings and subsidiaries’ debt and for general corporate purposes.
Country Garden Holdings is a Beijiao, China-based property development company.
| Issuer: | Smart Insight International Ltd.
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| Guarantor: | Country Garden Holdings Co. Ltd.
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| Issue: | Guaranteed convertible bonds
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| Amount: | HK$15.6 billion
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| Maturity: | Jan. 27, 2019
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| Coupon: | 0%
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| Price: | Par
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| Redemption price: | 100.75
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| Yield: | 0.75%
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| Initial conversion premium: | 20%
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| Conversion price: | HK$20.556
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| Conversion rate: | 758,902,510
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| Call: | Callable for tax purposes or if 90% of principal amount has been converted or redeemed at a price to give a yield to maturity of 0.75%
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| Put: | Upon a fundamental change
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| Bookrunner: | Goldman Sachs
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| Pricing date: | Jan. 16
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| Settlement: | Jan. 19
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| Distribution: | Regulation S
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| Stock symbol: | HKG: 2007
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| Stock reference price: | HK$17.13
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| Stock price | HK$17.78 at close on Jan. 16
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| Market capitalization: | HK$351.54 billion
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