Ping An Unveils $3.5 Billion Convertible Bond Issuance to Fuel Future Growth

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The headquarters of Ping An Insurance Group in Shanghai.

Ping An Insurance Group Co. of China Ltd. announced plans Tuesday to issue $3.5 billion of convertible bonds to replenish its capital and support new business initiatives.

The five-year bond’s coupon was set at 0.875% a year, and its conversion price at HK$43.71 a share, a 21.25% premium over its Hong Kong-listed shares’ closing price of HK$36.05 on Monday, the insurance giant said in a regulatory filing.

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Ping An Insurance plans to issue $3.5 billion of convertible bonds with a 0.875% coupon rate and a 21.25% premium conversion price.
Proceeds will fund business development in finance, healthcare, and elderly care, unlike recent JD.com and Alibaba bonds for stock buybacks.
The issuance could boost the solvency ratio by 3.1 percentage points, helping to stabilize dividends despite low interest rates.

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Who’s Who

Ping An Insurance Group Co. of China Ltd.: Ping An Insurance Group Co. of China Ltd. plans to issue $3.5 billion of convertible bonds to enhance capital and support new business initiatives in finance, healthcare, and elderly care. The five-year bonds have a 0.875% coupon and a conversion price at a 21.25% premium over its previous closing price. The issuance will increase bondholders' stake to 3.32% upon full conversion. The move aims to stabilize and boost long-term dividends despite persistent low interest rates.

JD.com Inc.: JD.com Inc. recently issued convertible bonds aimed at buying back stock, unlike Ping An Insurance Group, which plans to use proceeds for business development.

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd. recently issued convertible bonds aimed at buying back stock, differing from Ping An Insurance's approach of using the proceeds to fund future business initiatives.

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What Happened When

Monday, July 15, 2024：: Ping An Insurance Group Co. of China Ltd.'s Hong Kong-listed shares closed at HK$36.05.

Tuesday, July 16, 2024：: Ping An Insurance Group Co. of China Ltd. announced plans to issue $3.5 billion of convertible bonds.

Tuesday, July 16, 2024：: Ping An’s A shares and H shares fell by 3.15% and 5.41%, respectively.

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