Chow Tai Fook reportedly issuing $7.85b in bonds

Chow Tai Fook (1929) is planning to issue HK$7.85 billion of convertible bonds maturing in 2030, Bloomberg News reported, citing a deal term sheet.

The bonds will carry an initial conversion premium of 35 to 45 percent above the strike price set via a delta placement, a mechanism that allows investors to hedge their positions. The coupon is expected to range from 0 to 0.5 percent, with interest paid semiannually, the report said.

As part of the transaction, Chow Tai Fook plans to repurchase up to HK$1.57 billion worth of shares to support the hedging process, Bloomberg reported.

Data from the Central Clearing and Settlement System on June 13 showed that the number of Chow Tai Fook shares registered in the system rose by 400 million, with UBS accounting for 399.8 million of that increase, boosting its stake from 2.27 percent to 6.27 percent.

The convertible bonds will become exercisable from June 30, 2028. UBS is acting as the sole bookrunner for the offering, Bloomberg said.

STAFF REPORTER