China Merchants Land to price $250 million five-year convertibles to yield 0.5%-1%, up 20%-25%

By Rebecca Melvin

New York, June 2 – Cosmos Boom Investment. Ltd., a subsidiary of China Merchants Land Ltd., plans to price $250 million of five-year convertible bonds at par of $200,000 on Tuesday at terms that were talked at a 0.5% to 1% coupon and a 20% to 25% initial conversion premium, according to a term sheet.

The bonds are credit enhanced by a standby letter of credit under which China Construction Bank Corp., Hong Kong branch, can make a claim under the letter of credit on behalf of the bondholders.

The Regulation S offering has a $40 million greenshoe and was being sold via joint bookrunners BofA Merrill Lynch CCB International, China Merchants Securities (HK) and DBS Bank Ltd.

The bonds are non-callable for 18 months and then they are provisionally callable if shares exceed 130% of the conversion price for 20 out of 30 consecutive trading days. The bonds are putable at year three.

The bonds are expected to close on June 23 and to be listed on the Hong Kong Stock Exchange.

Hong-Kong-based China Merchants is a real estate development company focused on properties in the People’s Republic of China.

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