Hong Kong Exchanges ups offering of convertibles to $500 million

By Rebecca Melvin and Jennifer Chiou

New York, Sept. 24 - Hong Kong Exchanges and Clearing Ltd. now plans to issue $500 million of convertible bonds, up from $400 million, at a fixed coupon as part of the financing of its previously announced acquisition of LME Holdings Ltd., or the London Metal Exchange.

The offering is subject to shareholder approval and other conditions, and the increased amount equates to about HK$3,876,550,000.

The Hong Kong Exchanges board said that it opted to raise the proposed amount after a favorable bookbuilding process.

The bonds will be convertible at a conversion price of HK$160 per share, subject to adjustments.

Assuming full conversion at the initial conversion price, the bonds will be convertible into 24,228,437 shares, representing 2.23% of the issued share capital of the Hong Kong Exchanges.

The offer price for LME was initially to be financed from existing cash and new bank facilities, short- and long-term loan facilities totaling at least £1.1 billion, secured from a group of banks including China Development Bank Corp., Deutsche Bank AG, the Hongkong and Shanghai Banking Corp. Ltd. and UBS AG.

Current market conditions and investor feedback has prompted Hong Kong Exchanges to tap the financial market for funding the acquisition for cash, according to a company release.

Hong Kong Exchanges is a securities market operator.

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