China’s first credit-purchased convertible bonds open to fanfare
The six-year bonds will be redeemable at a price of 106 yuan upon maturity
The country’s first credit-purchased convertible bonds were issued Monday to huge demand from individual and retail investors, Yicai.com reported.
Beijing Oriental Yuhong, China’s only listed waterproofing company, released its convertible bond with an issuance scale of 1.84 billion yuan (US$280 million), the report said.
The six-year bond will be redeemable at a price of 106 yuan upon maturity, and holders of the bonds will be able to convert them to shares at a price of 38.48 yuan after six months.
A cap of 10 million yuan was set for every account holder, the report noted, in lieu of the strong demand.
The new convertible bonds come after new regulations made rule adjustments to the purchase method, whereby companies are forced to issue credit-purchased bonds instead of capital-purchased, so that they will not freeze up capital when issuing the bonds.
According to data provided by Wind, the share price of Beijing Oriental Yuhong has rose 13.94% from September 7 to September 22.