NEW World Development is seeking US$150 million in a bond and warrant issue to pay for China infrastructure projects, including a number of toll roads and at least two power stations. The issue of 1996 zero coupon guaranteed bonds at an issue price of 83.71 per cent with net proceeds of US$122.6 million is being undertaken by New World Finance (BVI). A complimentary issue of 56.61 million warrants, conferring rights to subscribe to HK$1.1 billion of New World shares was also undertaken at HK$3.90 each to raise HK$214 million, or the remaining US$27.4 million of the aggregate sum intended to be raisedby the zero coupon bond. In the third financing package of its type to be undertaken by a Hongkong-listed blue chip, Barclays de Zoete Wedd is the sponsor and joint underwriter of the warrant issue with Credit Suisse First Boston in Hongkong, while Credit Suisse First Boston wasthe manager of the bond issue. With a conversion price of $19.50 on the warrant, the issue was placed on a premium of 20 per cent, a gearing of five times and an implied volatility of 32 per cent, lower than the market average of 41 per cent to 43 per cent. The subscription rights on the warrant become effective on April 19 this year and expire on April 5, 1996. At present the subscription rights represents 3.6 per cent of the issued share capital. According to a spokesman at BZW, China International Trust and Investment Corp's acquisition of its 20 per cent stake in Hongkong Telecom was financed in a similar fashion in early 1990. Last April New World raised HK$850 million in a three-year bond and warrant issue. The BZW spokesman said: ''This means of financing was popular among Japanese companies in the middle to late 1980s and is quite common elsewhere in Asia. ''The warrants provide the means to offer the discount on the bond issue and the subscription total to these shares pays the majority of the principal at the end of the period on a low effective yield which is rolled up.'' In many cases in Japan the value of the bond issuers shares fell, leaving the warrants expiring without conversion and the company to pick up the whole of the debt repayment liability. A statement from New World last night said: ''The bonds will be privately placed by CS First Boston (Hongkong) primarily with financial institutions and will not be listed on any stock exchange.'' The close in respect of the issue will be on April 15 this year. In a statement covering the warrant issue, BZW said it would be seeking a listing for the derivative on the Hongkong stock exchange. New World has one of the largest China land banks of any Hongkong-listed blue chip, amounting to 48 million sq ft and making up at least 10 per cent of the company's net asset value. The group has been concentrating on building on its mainland China operational experience.