China Galaxy expects A share convertibles to trigger redemption event

By William Gullotti

Buffalo, N.Y., Nov. 16 – China Galaxy Securities Co. Ltd. expects to be able to redeem some or all of its RMB 7.8 billion A share convertible corporate bonds due to exceeding the 130% price hurdle, according to an announcement Thursday.

Per the terms of the convertibles, the company is permitted to redeem some or all of the outstanding shares at the nominal value plus accrued interest if the closing price in at least 15 trading days out of any 30 consecutive trading days exceeds 130% of the prevailing conversion price.

As previously reported, the conversion price was adjusted to RMB 9.70 per share on July 17.

The company tallied nine consecutive trading days, from Nov. 6 to Nov. 16, where the prevailing conversion price was in excess of RMB 12.61 per share.

Although the announcement made note that the redemption option will become available if the prevailing conversion price exceeds the 130% threshold for six out of the next 21 consecutive trading days, it did not indicate if or how the redemption will be exercised.

The series was issued in March 2022 and will otherwise mature on March 23, 2028.

China Galaxy Securities is a Beijing-based brokerage and investment bank.

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