Hang Lung Properties is expected to use the proceeds from its five-year HK$1.5 billion convertible bond issue to buy land at public auctions or other property investment, according to analysts.
It will be the first Hong Kong dollar-denominated convertible bond issue by a blue-chip company, said Hang Lung Properties executive director Terry Ng.
Mr Ng said a bond issue denominated in Hong Kong dollars would carry less currency risk. Blue-chip companies usually issue US dollar convertible bonds.
The issue could raise up to HK$1.75 billion with full exercise of option.
The company said last night the initial conversion price had been fixed at HK$9 and the interest rate at 3.4 per cent per annum.
Mr Ng said proceeds would be used for general corporate and working capital, and future property investment. He did not elaborate whether Hang Lung was preparing for land acquisition.