Henry Cheng’s Chow Tai Fook Jewellery Group Ltd has raised HK$8.8 billion ($1.1 billion) from a larger-than-planned sale of convertible bonds, making it one of Hong Kong’s biggest this year.
The bonds due in 2030 will carry a 0.375 percent coupon, the company said in a filing Tuesday, confirming an earlier Bloomberg News report. The deal was originally marketed to raise HK$7.85 billion, according to terms seen earlier by Bloomberg News.
The offering drew orders for multiple times the number of bonds available, a person familiar with the matter said, asking not to be identified because the information isn’t public. Representatives for Chow Tai Fook didn’t immediately respond to a request for comment.
The bonds carry an initial conversion price of HK$17.32 each and will be convertible into about 508 million new shares, the company said.
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Chow Tai Fook, which recently reported better than expected earnings, has been campaigning to lift its image, positioning itself closer to premium labels such as Tiffany and Cartier instead of a traditional gold retailer.
UBS Group AG, the sole bookrunner of the deal, may conduct a share placement to help investors hedge through so-called covered short sales, and Chow Tai Fook said it expects to buy back 122.4 million shares at HK$12.83 each.
Chow Tai Fook, which plans to use the proceeds for the jewelry business and general working capital, said the company carried out its first major fundraising since its 2011 IPO as a low-cost financing option amid the current interest-rate environment.
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Chow Tai Fook shares fell as much as rose 9.6 percent to HK$12.40 in early Hong Kong trading. Prior to Tuesday, the stock had doubled this year after falling 42 percent last year.
Meanwhile, Asia has seen a string of issuance of bonds convertible into stock this year. Singapore’s Grab Holdings Ltd last week raised $1.5 billion in a convertible-bond deal that brought in more cash than initially expected. Ping An Insurance (Group) Co of China Ltd earlier this month sold HK$11.8 billion in such bonds.
Like Chow Tai Fook, Ping An Insurance also denominated its convertibles in Hong Kong dollars. The currency has slumped in recent weeks toward the weak end of its official trading band against the greenback, after local interest rates fell to a three-year low and widened the discount to their US peers to rarely seen levels.
