Ctrip.com to price up to $1 billion convertible bonds in two tranches

By Rebecca Melvin

New York, June 17 – Ctrip.com International Ltd. plans to price up to $1 billion of convertible senior notes in two tranches, including $500 million of notes due 2020 and $500 million of notes due 2025, according to market sources on Wednesday.

The five-year tranche was seen pricing with a 0.75% to 1.25% coupon and a 42.5% to 47.5% initial conversion premium.

The seven-year tranche was seen pricing with a 1.5% to 2% coupon and the same 42.5% to 47.5% premium.

There is an over-allotment option for up to $150 million of additional notes.

Both tranches are non-callable for life. Holders can put the 2020 bonds on July 1, 2018, and holders can put the 2025 bonds on July 1, 2020.

The Regulation S and Rule 144A notes are being sold via bookrunner J.P. Morgan Securities LLC, and pricing was expected Thursday after the market close.

In connection with the pricing of the bonds, Ctrip.com plans to enter into convertible note hedge and warrant transactions, or a call spread.

Proceeds will be used to pay the net cost of the call spread and for general corporate purposes, including a concurrent repurchase of its ADSs and potential note retirement working capital and potential acquisitions of complementary businesses. Proceeds will also be used to pay the cost of a convertible note hedge transaction.

Shanghai-based Ctrip.com is a travel services provider.

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