AUDIO product maker Alco Holdings is to issue $120 million worth of convertible notes to New York-based Blackstone Capital Partners Asia, a US$800 million investment fund.

The notes are to be issued in two tranche, each with a five-year term and will carry a 7.2 per cent yield. The first tranche, of HK$80 million, can be converted into Alco shares at $1.25 per share within five years of September 23 this year.

The second tranche, of $40 million, can be converted at $1.25 per share within the three years from October 31 this year; at $1.30 per share from the third year of issue; and at $1.35 per share from the fourth year of issue.