Noble Group, a Hong Kong-based logistics company, raised US$250 million from selling convertible bonds with a sky-high conversion premium of 65 per cent, taking advantage of strong demand for its offering.
The seven-year, zero-coupon bond was priced to yield 5.9 per cent. It was more than two times covered within 90 minutes of the book-building process, one source said.
The company initially raised US$200 million on Tuesday before exercising a US$50 million greenshoe option yesterday morning, after the bond traded up after the market close. Citigroup and JP Morgan arranged the sale.
Bondholders can change their bonds into shares when the company's Singapore-listed shares hit S$2.78 (HK$14.29), compared with the reference price of S$1.68.
'I'm quite surprised [with the premium] because the stock has already had a good run,' said one convertible bond trader.
The only other convertible bond out of Asia to feature a higher conversion premium was Mumbai-based Glenmark Pharmaceutical, which raised US$30 million with a 71 per cent premium in December 2004.