By Mary-Katherine Stinson
Lexington, Ky., Oct. 18 – Taiwan Cement Corp. priced a $420 million offering of its first unsecured foreign currency convertible bonds, according to a notice.
The zero-coupon bonds due Oct. 24, 2028 will be issued at par with a face value of $200,000.
Bondholders can require Taiwan Cement to redeem the bonds, in whole or in part, on the third anniversary. Bondholders may also request redemption if the company’s common shares are delisted or because of a change of control, in all cases at the early redemption amount.
The bonds will be subject to an early redemption by Taiwan Cement beginning on the third anniversary upon reaching a 130% hurdle, if more than 90% of the bonds have been early redeemed, converted, repurchased or canceled or because of changes in taxation laws resulting in an increased cost for the company. Bondholders may elect not to have their bonds redeemed but they will not be entitled to any additional amounts or reimbursement of the additional tax.
The early redemption amount is the principal amount with a yield of 2.65%.
The redemption amount will be converted at the rate of $1.00 to NT$32.293, as determined on the pricing date, and then converted back into dollars using the prevailing exchange rate for payment in dollars.
The bonds’ conversion price is NT$37.27 per share, which has been determined on approximately 111.4% of the closing price of the company’s common shares on the Taiwan Stock Exchange as of Oct. 17. If all the bonds were converted this year, the share dilution effect would be around 4.84%.
Proceeds will be used to repurchase the first unsecured overseas convertible corporate bonds issued by Taiwan Cement in 2021, which is expected to reduce dependence on bank borrowings and increase flexibility in the use of funds, the company noted in the release.
The issuer is a Taipei, Taiwan, cement company.
| Issuer: | Taiwan Cement Corp.
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| Amount: | $420 million
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| Issue: | Foreign currency convertible bonds
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| Maturity: | Oct. 24, 2028
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| Coupon: | 0%
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| Price: | Par
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| Yield: | 0%
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| Conversion price: | NT$37.27 per share
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| Call features: | Starting on third anniversary, subject to 130% hurdle; if 10% or less of the original principal amount remains outstanding; at any time for taxation reasons at par with a yield of 2.65%
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| Change of control: | At par with a yield of 2.65%
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| Put option: | On the third anniversary at par with a yield of 2.65%
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| Delisting: | At par with a yield of 2.65%
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| Announcement date: | Oct. 18
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| Settlement date: | Oct. 24
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