Noble rushes bond issue to raise US$200m

PUBLISHED : Tuesday, 16 March, 2004, 12:00am
UPDATED : Tuesday, 16 March, 2004, 12:00am


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Hong Kong-based commodity trader and maritime bulk carrier Noble Group yesterday launched a placement of US$200 million worth of convertible bonds to fund potential strategic acquisitions and refinance existing debts, according to market sources.

It followed bursts of quick share and convertible bond issues recently on the back of rising share prices in tandem with low interest rates and came amid a powerful surge in freight rates helped by China's robust commodity demand.

Noble was selling the convertible bonds to international institutional investors at par value of US$1,000 each, according to information sent to fund managers.

The five-year unsubordinated and unsecured bonds maturing in April 2009 carry a coupon of 0.9 per cent per year. They are convertible into Noble's Singapore-listed shares from May 20 of this year to March 21, 2009.

The initial conversion price of S$5.864 represents a 34.49 per cent premium over its closing price of $4.36 yesterday.

Noble is also raising the funds as general working capital. The issue's sole bookrunner JP Morgan declined to comment last night.

Cazenove Asia acted as co-lead manager.

Rising share prices combined with low interest rates have unleashed spurts of secondary issues of shares and convertible bonds from companies to fund expansion and refinance debts.

Hong Kong firms large and small had raised more than HK$64.4 billion from the market between November and the middle of last month this way.

Second-tier property developer and investor Far East Consortium International last week took advantage of the almost zero interest rate to raise US$60 million through a five-year convertible bond to refinance its existing loans.

Noble's net profit soared 103 per cent to US$61.3 million against a 49 per cent increase in turnover over the year to December.

China's demand for raw materials was a main force behind a 300 per cent upswing in international freight rates last year, and Noble's logistics division was a key profit driver.