By Rebecca Melvin
New York, Aug. 5 - Zeus (Cayman) II, a subsidiary of South Korean steelmaker Posco, priced ¥24.53 billion of five-year zero-coupon notes exchangeable into American Depositary Shares of SK Telecom Co. Ltd., to yield 1%, with an initial conversion premium of 32%, according to a syndicate source.
The Regulation S deal came significantly smaller than the initially talked ¥41 billion size. And it came at the cheap end of talk, which was for a 0.5% to 1% yield and 32% to 35% premium.
Bookrunners were Bank of America Merrill Lynch, Barclays Capital, Citigroup Global Markets Ltd., Deutsche Bank AG Hong Kong branch, and JPMorgan.
The notes were offered to investors in Europe and Asia and are expected to be listed on the Singapore Exchange.
The notes are non-callable until Aug. 18, 2014 and then are provisionally callable if the share price is at least 120% of the conversion price. There are no investor puts.
Proceeds will be used to repay exchangeable notes issued in 2008.
The steelmaker is based in Pohang, South Korea.
| Issuer: | Posco
|
| Issue: | Exchangeable bonds
|
| Exchange security: | SK Telecom ADS
|
| Amount: | ¥24.526 billion
|
| Maturity: | Aug. 18, 2016
|
| Bookrunners: | Bank of America Merrill Lynch, Barclays Capital, Citigroup Global Markets, Deutsche Bank AG, Hong Kong Branch, JPMorgan
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 1%
|
| Conversion premium: | 32%
|
| Conversion price: | US$15.75
|
| Price talk: | 0.5%-1% yield, up 32%-35%
|
| Calls: | Non-callable until Aug. 18. 2014, then provisionally callable at a price hurdle of 120%
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | Aug. 4
|
| Settlement date: | Aug. 18
|
| Reference share price: | US$15.72 closing of SK Telecom ADS on Aug. 3
|
| Distribution: | Regulation S
|
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