Huazhu Group talks $450 million six-year convertible notes to yield 3%-3.5%, up 30%-35%

By Abigail W. Adams

Portland, Me., May 7 – Huazhu Group Ltd. plans to price $450 million of six-year convertible notes after the market close on Thursday with price talk for a coupon of 3% to 3.5% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, UBS Securities LLC and Deutsche Bank Securities Inc. are bookrunners for the Rule 144A and Regulation S offering, which carries a greenshoe of $50 million.

The notes are non-callable except for a tax event. They are putable on May 1, 2024 or upon a fundamental change.

Proceeds will be used to repurchase the company’s 0.375% convertible notes due 2022 and to repay onshore and offshore loans.

Huazhu Group is a Shanghai-based hotel management company.

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