New York, May 18 – China Mengniu Dairy Co. Ltd. priced $194.8 million of five-year zero-coupon bonds exchangeable into China Modern Dairy Holdings Ltd. common stock at par to yield 1.25%, according to a company announcement.
DBS Bank Ltd. is global coordinator and bookrunner with BOCI Asia Ltd.
The bonds will be redeemed at 106.43% of par at maturity.
The exchange price of HK$2.1995 is 33% above the closing stock price of HK$1.65 on May 18.
China Mengniu can call the bonds starting June 5, 2020 subject to a 130% stock price hurdle.
There is a put option on June 5, 2020.
The underlying shares make up 11.24% of the share capital of China Modern Dairy.
In connection with the bond issue, the company entered into a securities lending agreement with BOCI Financial Products Ltd. under which it agrees to lend all 689,438,782 of the underlying shares.
China Mengniu said it is offering the bonds in order to reduce its financing cost. Proceeds will be used to refinance existing debt and for general corporate purposes.
China Mengnui is a Hong Kong-based dairy company. China Modern Dairy is a dairy farming company is based in Maanshan, Anhui, China.
| Issuer: | China Mengniu Dairy Co. Ltd.
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| Issue: | Exchangeable bonds
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| Underlying stock: | China Modern Dairy Holdings Ltd.
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| Amount: | $194.8 million
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| Maturity: | June 5, 2022
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| Coupon: | 0%
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| Price: | Par
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| Redemption price: | 106.43
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| Yield: | 1.25%
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| Initial exchange price: | HK$2.1995
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| Exchange ratio: | 707,842.69 shares per $200,000 principal amount
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| Exchange premium: | 33.3%
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| Call: | Starting June 5, 2020 subject to 130% hurdle at price to give 1.25% yield
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| Put: | June 5, 2020
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| Pricing date: | May 18
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| Settlement date: | June 5
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| Bookrunners: | DBS Bank Ltd. (global coordinator), BOCI Asia Ltd.
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| Distribution: | Regulation S
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| Stock ticker: | Hong Kong Stock Exchange: 1117 (for China Modern Dairy)
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| Stock price: | HK$1.65 at close on May 18 (for China Modern Dairy)
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| Market capitalization: | HK$10.4 billion (for China Modern Dairy)
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