[HONG KONG] Ping An Insurance (Group) of China has sold HK$11.8 billion (S$1.9 billion) in bonds that can be converted into shares listed in Hong Kong, marking the insurance giant’s second such offering in under a year.
The convertible bonds carry a zero coupon and are due in 2030, according to a company filing in Hong Kong on Wednesday (Jun 4) and earlier deal terms seen by Bloomberg News. The insurer said it would use the proceeds to develop its core business, support new initiatives in healthcare and elderly care, and strengthen its finances.
Last year, Ping An Insurance sold US$3.5 billion in convertible bonds for a similar purpose, joining a wave of Chinese companies tapping the market to raise funds at lower rates than traditional debt. The latest fundraising comes after the insurer’s profit fell 26 per cent in the first quarter, as a stock market decline and lower bond yields dented investment returns.
Ping An Insurance’s deal is the biggest convertible-bond issuance denominated in US dollars or Hong Kong dollars by a Chinese company this year, according to data compiled by Bloomberg. Streaming platform Bilibili raised US$690 million through the sale of convertibles last month, while data centre operator GDS Holdings raised US$550 million.
Alongside the convertible bond offering, the company is also conducting a share placement to facilitate hedging for bond investors, known as a delta placement. The convertible bond’s initial conversion price is of HK$55.02, reflecting a conversion premium of 21.5 per cent over the delta placement price of HK$45.28, terms of the deal show.
The bonds will be convertible into about 213.8 million shares, representing roughly 2.9 per cent of Ping An Insurance’s existing shares in Hong Kong and around 1.2 per cent of all issued shares, it said. Ping An Insurance’s shares are listed in Hong Kong and Shanghai.
Ping An Insurance is selling the bonds, which are denominated in Hong Kong dollars, through a so-called Regulation S offering, which excludes onshore US institutions from the deal and exempts the issuer from certain US regulatory filing obligations.
The investor put date is on or about Jun 11, 2028, and there is a 90-day lockup.
Morgan Stanley is the sole global coordinator and bookrunner. Ping An Securities (Hong Kong) is a joint lead manager. BLOOMBERG
