There is no let up in the rush by Chinese technology companies to issue convertible bonds, with online travel agency Trip.com now following industry giants such as Alibaba Group Holding into the action, reports Caixin. Trip.com announced Tuesday an offering of $1.3 billion convertible senior notes due in 2029 to help repay debt, expand overseas and to provide working capital. To ease any dilution, the company plans to repurchase 6 million American depository shares for about $300 million at $50.16 each, the same as the latest close, according to a separate statement on the bond pricing Wednesday.
Trip.com priced the bonds with a coupon of 0.75% and conversion premium at about 32.5%. It expects the offer to attract convertible arbitrage, a strategy where funds purchase notes and short the underlying stock, which could affect share price.
The issuance follows several announcements last month, the biggest being Alibaba’s record-breaking $5 billion issue. JD.com set the ball rolling in May with a $2 billion convertible bond offering and computer-maker Lenovo Group sold $2 billion zero-coupon convertible bonds to a unit of Saudi Arabia’s sovereign wealth fund.